The association between individual audit partners’ risk preferences and the composition of their client portfolios

Eli Amir (), Juha-Pekka Kallunki () and Henrik Nilsson ()
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Eli Amir: Tel Aviv University
Juha-Pekka Kallunki: University of Oulu
Henrik Nilsson: Stockholm School of Economics

Review of Accounting Studies, 2014, vol. 19, issue 1, No 4, 103-133

Abstract: Abstract We explore whether audit partners’ attitude towards risk, as measured by their personal criminal convictions, are reflected in the composition of their client portfolios. Analyzing a unique dataset of Swedish audit partners’ criminal convictions, we find that the clients of audit partners with criminal convictions are characterized by greater financial, governance, and reporting risk than those of audit partners without criminal convictions. Also, clients of audit partners with criminal convictions pay larger audit fees, on average, than those of auditors without criminal convictions.

Keywords: Audit partners; Criminal convictions; Client portfolios; Audit risk; Accounting conservatism (search for similar items in EconPapers)
JEL-codes: G30 K42 M41 M42 (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1007/s11142-013-9245-8

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