Do Increasing CPA Retirement Rates Have A Negative Effect On Audit Quality?
AuthorCollier, Caroline Hope
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PublisherThe University of Arizona.
RightsCopyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.
AbstractI examine the effect of increasing retirement rates on audit quality, specifically restatements and abnormal accruals. The AICPA estimates that from the years 2015- 2030 approximately 75 percent of CPAs will retire. My research seeks to find if there is a relationship between increasing retirement rates and audit quality to better help audit firms, client firms, and others in the financial industry be prepared for the potential implications of this steep increase in retirement rates. I hypothesize that as retirement rates increase audit quality will decrease. Regression analysis is used to test this hypothesis with the independent variable of labor force retirement rates and the dependent variables of abnormal accruals and restatements. The abnormal accruals proxy proved to be contrary to my hypothesis whereas the restatement proxy was supportive of my hypothesis. The findings of this study further the audit quality line of research by showing that abnormal accruals and restatements are significantly correlated with retirement rates meaning that audit quality is impacted by retirement rate increases.
Degree ProgramHonors College