Audit Partner Identification: Unintended Consequences on Audit Judgment

We examine the impact of partner identification, a regulation proposed by the PCAOB and contested by the audit profession, on audit partners' judgments. Based on accountability theory (e.g., Lerner and Tetlock 1999) and professionalism literature (e.g., Hall 1968; Adler and Kwon 2013), we conduct an experiment in which we manipulate partner identification at three levels (i.e., no identification, disclosure identification, signature identification) and ask 83 partners to make inventory writedown assessments and other judgments underlying their decision making. We find that, contrary to the PCAOB's stated purpose of enhancing audit quality, and consistent with the professionalism literature, partner identification-in the form of either disclosure or signature-yields more aggressive writedown judgments through its negative impact on partners' self-reported measures of commitment to the profession and, in turn, commitment to the public. This result suggests that regulators should consider possible unintended consequences of accountability-inducing regulations.