Individual Auditor Turnover and Audit Quality – Large Sample Evidence

We examine the relationship between audit quality and audit-office level individual auditor turnover in the U.S. Using resumes of over 65,000 auditors from, we find that audit offices with higher turnover have a greater likelihood of annual report restatements by clients, and are more likely to fail to detect material weakness in clients’ internal controls over financial reporting. The detrimental effect of auditor turnover is mainly attributable to the departure of auditors with 4-8 years’ experience, and is more pronounced for less important clients, for engagements with long auditor tenure, and for large offices. Our results are robust to using outside job opportunities as an instrument variable and alternative measures of audit quality. Our findings directly inform the current policy debate initiated by the PCAOB on whether disclosures of audit quality indicators, particularly auditor turnover, will help investors better evaluate audit quality.
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