The Importance of Partner Narcissism to Audit Quality: Evidence from Taiwan
研究发现台湾审计报告中合伙人签名大小衡量的自恋程度越高，审计质量越好，主要因为自恋增强了审计独立性，减少了向客户压力屈服而出具机会主义报告的可能性。
ABSTRACT Relying on the size of partner signatures in audit reports in Taiwan to measure their narcissism, we find that audit quality rises with partner narcissism. Our analysis also implies that changes in audit quality are positively associated with changes in partner narcissism stemming from mandatory partner rotation. We also find that the impact of partner narcissism on audit quality only manifests when auditor independence is more likely to be compromised, although it does not vary with engagement complexity. These results suggest that partner narcissism improves audit quality mainly through increased auditor independence, rather than auditor competence. Additionally, we document that although partner narcissism has no perceptible impact on the incidence of Type I going concern reporting errors, it is negatively associated with the probability of making a Type II error, implying that more narcissistic partners are less likely to succumb to client pressure to issue opportunistic reports. Data Availability: Data are available from public sources as identified in the text. JEL Classifications: M40; M42.