There is no ‘I’ in team: An analysis of audit partner narcissism from the team aspect

Tomomi Takada, David Lau*, Jeffrey R. Casterella, Norman Wong

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

We investigate the relation between the degree of audit partner narcissism and income-increasing earnings management of client firms at both the individual and team levels of analysis in Japan. With the use of the size of audit partner signatures as a proxy for the degree of narcissism, we find that audit partner narcissism is negatively related to income-increasing earnings management. Our team level of analysis shows that audit team partner narcissism is also negatively related to income-increasing earnings management. When an audit engagement team has more than one narcissistic partner, we establish that narcissism is only effective in constraining income-increasing earnings management if the lead partner in the team is narcissistic. Furthermore, our team level of analysis shows that the size of the engagement team has a moderating effect on lead partner narcissism, suggesting that narcissistic leaders tend to behave differently in larger teams.

Original languageEnglish
Pages (from-to)751-768
Number of pages18
JournalInternational Journal of Auditing
Volume25
Issue number3
DOIs
Publication statusPublished - 2021 Nov

Keywords

  • audit engagement team
  • audit judgment
  • audit partner
  • audit quality
  • earnings management
  • narcissism

ASJC Scopus subject areas

  • Accounting
  • Economics, Econometrics and Finance(all)

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