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

Eli Amir, Juha Pekka Kallunki, Henrik Nilsson

Research output: Contribution to journalArticlepeer-review

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.

Original languageEnglish
Pages (from-to)103-133
Number of pages31
JournalReview of Accounting Studies
Volume19
Issue number1
DOIs
StatePublished - Mar 2014

Keywords

  • Accounting conservatism
  • Audit partners
  • Audit risk
  • Client portfolios
  • Criminal convictions

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