In this study, we examine the roles of audit firms and individual auditors in improving financial statement comparability. We conduct the study in the Chinese setting, in which the identities of signing auditors are revealed in audit reports and accounting standards are principle-based. After controlling for audit firm style, we find that firm pairs with shared signing auditors have incrementally greater comparability. Our results indicate that individual auditors exhibit their own personal style in implementing accounting standards and exercising professional judgment in the audit process. Overall, our study underscores the association between individual auditors and comparability, with practical implications for market participants and policymakers.
Research Article| March 27 2020
How a Shared Auditor Affects Firm-Pair Comparability: Implications of Both Firm and Individual Audit Styles
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Lili Jiu, Bin Liu, Yuanyuan Liu; How a Shared Auditor Affects Firm-Pair Comparability: Implications of Both Firm and Individual Audit Styles. AUDITING: A Journal of Practice doi: https://doi.org/10.2308/ajpt-17-008
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