Are the most capable auditors in the Big 4 firms?

  1. "Millán Tapia, Ana 1
  2. Ortín Ángel, Pedro
  3. Sundgren null, Stefan 2
  1. 1 Universitat Autònoma de Barcelona
    info

    Universitat Autònoma de Barcelona

    Barcelona, España

    ROR https://ror.org/052g8jq94

  2. 2 Umeå School of Business and Economics
Revista:
Documents de Treball ( Universitat Autònoma de Barcelona. Departament d'Economia de l'Empresa )

ISSN: 1988-7736

Año de publicación: 2016

Número: 1

Tipo: Artículo

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Otras publicaciones en: Documents de Treball ( Universitat Autònoma de Barcelona. Departament d'Economia de l'Empresa )

Resumen

The CPA exam provides an evaluation of the auditors' professional competences at the early stages of their careers. Using information from the results generated in Sweden, the paper shows that i) auditors at Big 4 firms are younger when they take the exam, ii) younger auditors and auditors at Big 4 firms perform better in the exam iii) there is a positive association between the results in the CPA exam and wage increases after having received the CPA certification and the association is stronger at Big 4 firms. This evidence is consistent with a theoretical model where Big 4 audit firms attract and retain the more capable auditors of each cohort, based on the imperfect information about the capabilities of the auditors that they have.

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