Publication
Title
Entrance requirements to the audit profession within the EU and audit quality
Author
Abstract
This paper examines the relation between the stringency of entrance requirements to the audit profession within the EU and audit quality. Regulators and standard setters generally believe that such entrance requirements have beneficial effects by increasing audit quality. Whether this is indeed the case, however, is an empirical question given that regulations governing the entry to the audit profession are not the product of competitive market forces. We argue that a higher educational degree and longer traineeship period will result in higher audit quality. We also hypothesize that a professional oath will be positively associated with audit quality. Based on a sample of 3,782 firms from 20 different EU member states, we assess the relation between these requirements and abnormal working capital accruals. Our findings indicate that the requirement of a master's degree compared with a bachelor's degree is significantly associated with better accruals quality of audited financial statements. Second, we find that abnormal working capital accruals are lower in countries that require a traineeship period of at least 3 years. Finally, we find mixed evidence for the effect of a professional oath as part of the entrance requirements on audit quality.
Language
English
Source (journal)
International journal of auditing. - Chichester, 1997, currens
Publication
Chichester : 2018
ISSN
1090-6738 [print]
1099-1123 [online]
Volume/pages
22 :3 (2018) , p. 360-373
ISI
000448847400004
Full text (Publisher's DOI)
Full text (publisher's version - intranet only)
UAntwerpen
Faculty/Department
Research group
Publication type
Subject
Affiliation
Publications with a UAntwerp address
External links
VABB-SHW
Web of Science
Record
Identification
Creation 10.12.2018
Last edited 20.09.2021
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