
doi: 10.2139/ssrn.2777950
This paper studies the effect of identifying the engagement partner of an audit on audit quality using an analytical model that focuses on individual partners' incentives and the partnership's choice of internal quality control. The model evaluates two distinct information settings: one where clients can observe only the partnership's past audit performance and the other where clients can also observe individual partners' past performances. Comparing the model outcomes between the two settings, the analysis shows that while partner identification increases individual partners' incentives to provide high quality audits for a given level of internal quality control within the partnership, it may also decrease the partnership's incentives to maintain good internal controls that actual audit quality suffers. This paper also shows that the level of external audit oversight is critical in determining whether partner identification enhances audit quality.
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