The association between the audit experience of regulated industry and audit quality

• Main Authors: Yuan-Liang Liu, 劉原良
• Other Authors: Yu-Shan Chang
• Format: Others
• Language: zh-TW
• Published: 2015
• Online Access: http://ndltd.ncl.edu.tw/handle/07238256069707858018

碩士 === 淡江大學 === 會計學系碩士班 === 103 === This study explored whether accountants with auditing experience in regulatory industries produce higher quality audits in non-regulatory industries. Due to the economic volatility sparked by a number of recent financial scandals, investors have begun to notice that accountants with certain skill sets may conduct more rigorous audits. Previous studies have taken the viewpoint that audit quality is determined by the independence of auditors and their ability to identify problems. Because regulatory industries are more complex than other industries in terms of legalities, accounting regulations, and corporate governance systems, accountants must be even more diligent in conducting audits and ensure that they have the professional knowledge and skills to manage the problems and risks faced by their clients. The research variables we explored were auditing experience in regulatory industries (cumulative number of years) and number of regulatory clients. Our samples were listed companies in Taiwan from 2009 to 2013. We discussed whether having auditing experience in regulatory industries affects the quality of audits in non-regulatory industries. Using dummy variables, we divided the subjects into two groups: those who had experience in auditing regulatory clients and those who did not. We found that among accountants who had audited regulatory clients, greater experience in auditing non-regulatory clients did not improve their audit quality. This may be because they are compelled to divide their resources, which reduces audit quality. However, as their cumulative experience in auditing regulatory clients increased, the quality of their auditing for non-regulatory clients also improved, particularly in the first year of auditing. The more regulatory clients they had, the better their quality of work for non-regulatory clients. This shows that accountants who have had audit experience in regulatory industries have more resources to contribute when auditing non-regulatory clients, which improves audit quality.