主讲人：陈旸旸教授，香港城市大学

题 目：The Importance of Auditors’ Unmet Promotion Expectations to Audit Quality

主持人：许晓芳教授，必赢nn699net副院长

时 间：2024年4月23日（周二）上午10:00-11:45

地 点：综合楼501

内容摘要：

Using proprietary data on the promotion of individual auditors in China, we examine whether auditors’ unmet promotion expectations shape audit quality. We employ a machine learning approach in constructing auditors’ unmet promotion expectations and rely on audit adjustments to measure audit quality. We document a negative relation between auditors’ unmet promotion expectations and the magnitude of audit adjustments. Reinforcing that audit quality suffers when auditors have unmet promotion expectations, cross-sectional results reveal that this relation is magnified when the auditor receives a lower salary, the auditor has stronger grounds to conclude that they have been treated unfairly, the auditor has a smaller social network that can limit their outside employment opportunities, the potential benefits of becoming a partner are larger; and the client is less valuable to the accounting firm. Additionally, auditors’ unmet promotion expectations exhibit a negative relation with audit effort, suggesting that this is a channel through which auditors’ unmet promotion expectations operates in influencing their performance. We also find that auditors’ unmet promotion expectations are positively associated with other audit quality proxies, including the client’s reporting of a small profit and abnormal accruals as well as the incidence of restatements and regulatory sanctions. Collectively, our evidence implies that unmet promotion expectations undermine auditors’ incentives, leading to lower audit quality.

主讲人简介：

Yangyang Chen is Professor and Head of the Department of Accountancy, City University of Hong Kong. He received his PhD from University of Melbourne and worked at Monash University and Hong Kong Polytechnic University before joining City University of Hong Kong. His research interests are in corporate finance and financial accounting, including management compensation, corporate innovation, audit quality and pricing, earnings management, corporate disclosure, and so on. His works have been published in The Accounting Review, Journal of Accounting Research, Journal of Financial Economics, Management Science, Journal of Financial and Quantitative Analysis, Contemporary Accounting Research, Review of Accounting Studies etc.