We examine the association between professionally qualified human capital and office audit quality. Using hand-collected data from 2009 to 2014 on Big 4 audit firm office CPA levels from 30 U.S. cities, we find that offices with relatively more professionally qualified human capital deliver...

This paper examines the demand and supply side factors associated with audit partner selection and assignment in the United States. First, we examine whether audit partner gender and experience are associated with board and management gender and experience. Second, we investigate whether...

This study provides novel information about the consequences of the Sarbanes-Oxley Act (SOX) by documenting differential audit fee shocks accompanying implementation of SOX 404(b) internal control tests and reports for clients in three size categories: large accelerated filers (LAFs), small...

We propose a new audit supplier competition construct: the Office-Client Balance (OCB), which consists of the relative abundance of suppliers (competing audit offices) and customers (audit clients) in a metropolitan (metro) area. From this construct, we derive a metro-level audit competition...

This article is the “Prequal” to Sherwood’s Targeted Return Portfolio Construction (TRPC) (2019) and Risk Capacity Portfolio Construction (RCPC) (2021) papers. This work presents the theoretical constructs in which Skew-Risk Modeling (Sherwood, 2019), the strategy applications within TRPC...

Collectively, the world's largest public accounting firms plan to invest over $9 billion into technology development and initiatives before 2025. These investments coincide with audit regulators, audit committees, and researchers worldwide undertaking initiatives to understand the benefits,...

Prior literature on auditor choice in the nonprofit market has largely focused on auditor size as a measure of audit quality. We extend this literature by examining a more refined definition of nonprofit audit quality which incorporates the twelve mission industries defined by the National...

This paper reassesses the significance of the concept of matching expenses to revenues as an accounting principle. We compare and contrast the historical views of authoritative bodies and the various scholars and practitioners who analyze this subject, drawing implications for future standard...

We examine auditors' use of in-house specialists (employed by auditors). We use data from PCAOB inspections of global network audit firms during 2006 to 2018, a period in which the use of specialists in audits increased from 50% to 90%. We document that the use of specialists is predictably...

We examine the engagements of audit partners in leadership roles to determine how their direct audit work reveals “tone at the top.” Although leadership partners are likely strong performers who have proven to be capable auditors, the administrative tasks associated with these roles could...