| Summary: | 博士 === 國立雲林科技大學 === 會計系 === 107 === This paper aims to explore the impact of the human capital-based audit style on the audit quality of Taiwanese international audit firms, Big 4 firms. This study extends Francis et al. (2014) and assigns an operational definition of audit style. We argue that audit style of Big 4 audit firms will be demonstrated in the capabilities of auditors. Therefore, this study establishes variables of human capital-based auditor style, including education level of auditors, work experience of auditors, continuing professional education of auditors, and professional licenses. These four indicators of auditor style are used to proxy the audit style of Big 4 firms. This study measures the audit quality by a discretionary accrual.
Based on the sample of 2004 to 2017 public companies in Taiwan, empirical results show that the four auditor styles are negatively correlated with discretionary accruals. In other words, auditor styles are positively correlated to audit quality.
We examine the correlation between the four auditor styles and audit quality for individual Big 4 firms. Except for continuous professional education, we find that work experience of auditors, continuing professional education of auditors, and professional licenses are positively related to audit quality. In addition, total sample is further divided into industry experts and non-industry experts. The results indicate that the four auditor styles are significantly and negatively correlated with discretionary accruals either for industry experts or for non-industry experts. Hence, our findings demonstrate that the four auditor styles are positively correlated to audit quality.
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