Empirical evidence on the relation between attributes of audit partners and audit quality
is of fundamental interest to investors, regulators, managers, and auditors. The objectives of this
study are as follow. First, we examine whether an audit partner’s expertise is associated with the
propensity to issue the first-time going concern opinion, our proxy for audit quality. Second, we
examine whether an audit partner’s tenure is associated with going concern opinion. Third, we
study the effect of auditor independence, proxied by client importance and non-audit fees earned
on going concern opinion. Finally, we examine whether an audit partner’s tenure and
independence attenuate the relation between partner expertise and going concern decision.
Our study is motivated by several reasons. First, though there is an extensive literature
on the determinants of auditors’ going concern opinion, much of this research focuses at the
national audit firm level or at the audit office level (see Carson et al. 2013 for a review). Only a
handful of empirical studies have focused on audit partner attributes, especially the role of audit
partner in going concern decisions.1 A focus on the audit partner is important because the audit
partner is the epicenter of an audit. The audit partner plays a key role in client screening and
acceptance, audit fee negotiation, audit planning and execution, resolution of disagreements with
the client, rendering the audit opinion, and the decision to continue the relationship with the
client. Further, the engagement partner also suffers serious harm as a result of an audit failure.
DeFond and Francis (2005) indicate that the unit of analysis can be pushed down (from the audit
firm level or the office level) further to an individual partner level to better understand audito