
doi: 10.2139/ssrn.3775116
This paper examines collective audit firm employee turnover and audit quality. Audit regulators have noted that employee turnover may be a root cause of audit quality issues identified during their inspections. However, there is limited empirical research on the determinants and consequences of collective audit firm employee turnover. We model the determinants of collective employee turnover and examine the effect of expected and abnormal audit firm employee turnover on engagement audit quality for a large sample of Belgian private and public company audit engagements. We find robust evidence for a negative association between employee turnover and audit quality and we find that abnormally high turnover is more detrimental to audit quality than expected turnover. Our contribution is initial empirical archival evidence of the effect of different types of audit employee turnover on engagement audit quality.
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