Private-Client Industry Specialization and Public-Client Audit Quality

This study examines whether auditor industry expertise in private clients influences audit quality of public client engagements in the United States. Private companies are significant to the U.S. economy as well as audit firms. I hand-collect auditors' private client information and construct a national, city, and joint national/city specialist designation and document a 17.9 to 47.3 (12.9 to 25.8) percent decrease in a public client's likelihood to misstate their financial statements (net income earnings management) when an auditor is a private client industry specialist. I then construct and test a city specialist measure using both private and public client data and find that it is economically stronger and more robust than the public only measure commonly employed by audit researchers. This study provides evidence of the importance of private companies to an audit firm's industry expertise as well as to researchers' use of city specialist measure in audit studies.

Name thesis:degree_name

Doctor of Philosophy

Level thesis:degree_level

doctoral

Discipline thesis:degree_discipline

Accounting and Information Systems

Department dc:contributor.department

Accounting and Information Systems

Grantor dc:publisher

Virginia Tech

Year dc:date.issued

2021

Author dc:creator

• Truelson, Jonathan Michael Terry

Chair dc:contributor.committeechair

• Lisic, Ling Lei

Committee members dc:contributor.committeemember

• Seidel, Tim
• Acito, Andrew A.
• Harding, Michelle
• Cobabe, Matthew A.
• Smith, Kecia Williams

• Auditor industry expertise
• Audit office
• Misstatements
• Accruals
• and Audit fees

Statement dc:rights

• In Copyright

Licence dc:rights.uri

• http://rightsstatements.org/vocab/InC/1.0/

Dc Identifier Other

vt_gsexam:30019

OAI identifier oai:identifier

oai:vtechworks.lib.vt.edu:10919/112012