The Effect of Audit Partner National Office Experience on Audit and Career Outcomes

Abstract

Large public accounting firms routinely tout national office rotational experience; however, there is little empirical evidence on the costs and benefits of national office experience for audit partners and their firms. We examine the implications of this experience using both qualitative and quantitative approaches. We begin by conducting 18 (4) semistructured interviews with audit partners with (without) national office experience. These interviewees share their perceptions of why auditors gain this experience, the benefits and challenges it entails, and how it influences subsequent audit work. Then, among a sample of audit partners, we empirically examine how national office experience affects their promotion timing, leadership opportunities, client assignments, and audit outcomes. We find that national office experience enables partners to secure certain leadership positions and, for those from less visible offices, to obtain promotions to partner more quickly. We also find that such experience improves audit quality when clients have issues that often involve national office consultations (i.e., material weaknesses). Finally, we find that partners with national office experience produce more timely audits, but only when their experience is recent. Overall, our study provides an initial analysis of the perceived and actual benefits of auditor national office experience.