Auditor Skill Demands and Audit Quality: Evidence from Job Postings

This study empirically examines the relation between audit quality and auditors’ cognitive and social skills. Using a novel data set of online job postings by accounting firms, we document substantial variation in the stated demand for auditors’ cognitive and social skills, suggesting that audit offices are not homogeneous in their preferences for such skills. We find a positive relation between audit quality and the prevalence of cognitive and social skills within an audit office’s job postings. This association is stronger for audit engagements that are more complex or require greater coordination, suggesting that cognitive and social skills are particularly important in engagements where effective communication and knowledge transfer, as well as sound professional judgment and skepticism, are needed. The association is also stronger for audit offices with greater investments in new technology, consistent with the complementary relation between cognitive and social skills and the use of technology. Overall, our study offers empirical evidence linking specific auditor skills to audit quality. This paper was accepted by Suraj Srinivasan, accounting. Funding: C. Ham acknowledges financial support from the Blanche “Peg” Philpott Faculty Fellowship. R. N. Hann acknowledges financial support from KPMG. W. Wang acknowledges the financial support from the Hong Kong Research Grant Council [Grant 11503720]. Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2022.01640 .

• 저널Management Science · 71(7) · 5805–5829
• 토픽Auditing, Earnings Management, Governance · Accounting
• DOI10.1287/mnsc.2022.01640
• 저자Charles Ham, Rebecca N. Hann, MaryJane Rabier, Wenfeng Wang