"Does an Auditor’s IQ Matter?"


Speaker:Juha-Pekka Kallunki, Oulu Universiy
Date: Wednesday 19 March 2014
Time: 14.00 - 15.30
Location: Building:One, Pearson Teaching Room

Further details

"Does an Auditor’s IQ Matter?" 


Evidence Based on Unique Data on Swedish Auditors



We explore whether auditors’ intellectual ability, as measured by their IQ scores obtained from psychological tests, matter in audit engagements. Our results of analysing audit engagements of listed Swedish firms over the sample period from 1999 to 2007 show that high IQ audit partners earn a premium in audit and consulting fees, if compared to those of low IQ audit partners. We also find that the observed auditor-level fee premium is attributable to the greater audit complexity in audit engagements of high IQ audit partners rather than due to greater client risk. This result indicates that high IQ audit partners are more involved in audit engagements that provide them with higher audit and consulting fees at a modest level of risk assessments.