Auditor multinational expertise and audit quality

Joshua L. Gunn, Paul N. Michas

Research output: Contribution to journalArticlepeer-review

31 Scopus citations


Over the past several decades, the scope of public companies' operations has become increasingly global. This has led to concern over the ability of audit firms to conduct high-quality audits across geographically dispersed foreign operations. We contribute to the growing body of research in this area by investigating the association between audit quality and local audit offices' expertise in conducting multinational audit engagements. We use two complementary measures to proxy for an audit office's multinational expertise: (1) local multinational market leadership, and (2) country-specific experience. Using a sample of multinational client firms headquartered in the United States, we consistently find that audit quality is stronger when the auditor possesses expertise conducting global group audits, possesses particular expertise in the country where a client has a significant subsidiary, or possesses both types of expertise on an engagement. Several sample partitions reinforce our main results. The results are robust to propensity score matching, as well as a placebo test using clients of the audit office that generate no foreign sales. Our evidence suggests that the challenge of conducting multinational audits is more easily met by auditors with expertise on these types of engagements.

Original languageEnglish (US)
Pages (from-to)203-224
Number of pages22
JournalAccounting Review
Issue number4
StatePublished - Jul 2018


  • Audit Quality
  • Auditor Expertise
  • Group Audits
  • Multinational Audits

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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