Topic: A Long-Lasting Impact of School Ties on Entry-Level Auditors’ Professional Development and Audit Quality

Speaker: Xinming Liu

Date & Time: 13:30-15:00 Friday, September 15, 2023

Venue: Room 245, Quan Xue Building

Organizers: School of Accounting, Dongbei University of Finance and Economics, P.R. China & Liaoning Capital Market Finance and Accounting Graduate Innovation and Academic Exchange Center

Abstract:

We examine whether school ties between entry-level auditors and partners affect an auditor’s long-term labor market outcome and professional advancements. Using individual auditors’ personal information, we document several important findings. First, entry-level auditors having school ties with the audit firms’ partners are more likely to be promoted faster than their peers without such connections. Second, these school-tie auditors exhibit lower audit quality and generate less audit fee revenue for the audit firms after promotion. Finally, the negative effects of school ties on auditors’ promotion speed, audit quality after promotion, and revenue-generation ability are mitigated when (a) both the entry-level auditors and the partners graduated from elite universities, and (b) the audit market is highly competitive. Overall, our results illustrate that social ties through the educational network have a long-lasting impact on auditors’ career development.

Introduction of Speaker:

Xinming Liu, associate professor and master supervisor in the Department of Accounting at the School of Management, Xiamen University, and the PhD in Accounting from National Chengchi University. Research areas include Capital Market Accounting Research in China and the United States, Auditing, Corporate Governance, etc. As the first author or corresponding author, she has published multiple academic papers in prestigious international and domestic academic journals such as Contemporary Accounting Research, European Accounting Review, Journal of Business Research, Accounting and Finance, and Accounting Research and Audit Research. She has presided over projects of the National Natural Science Foundation of China, key scientific research projects of the National Audit Office, innovation strategy research projects of Fujian Province, and participated in multiple national, provincial, and ministerial level projects. She was awarded the 14th Fujian Province Social Science Outstanding Achievement Award.

Special Attention:

Strictly prohibit recording and public dissemination of the lecture content without permission from the author and organizer, violators may be investigated for legal responsibility.