Downar, Benedikt
[Verfasser:in]
;
Ernstberger, Jürgen
[Sonstige Person, Familie und Körperschaft];
Koch, Christopher
[Sonstige Person, Familie und Körperschaft]
Determinants and Consequences of Auditor Dyad Formation at the Top-Level of Audit Teams
Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments April 2019 erstellt
Beschreibung:
This study investigates the determinants and consequences of forming dyads at the top level of audit teams, i.e., dyads between concurring and lead auditor. We apply the sociological theory of homophily, i.e., the implicit preference for similar others, to hierarchically structured auditor dyads. Semi-structured interviews with highly experienced auditors show that concurring auditors enjoy some autonomy in selecting the lead auditor, providing opportunities for homophily to matter. Our regression analyses reveal that sharing the same dialect and gender increases the likelihood of dyad formation beyond what one would expect based on the characteristics of the pool of available auditors. Further, we observe that forming auditor dyads sharing the same age is avoided, suggesting that the need to establish a legitimate hierarchical relationship through social differentiation represents a boundary condition for homophily. Testing for the consequences of auditor dyad formation using an instrumental variable approach, we find that auditor dyads sharing the same dialect provide lower audit quality. We conclude that homophily matters in auditor dyad formation with potentially adverse consequences for audit quality