Do Individual Auditors Have Their Own Styles? Evidence From Clients’ Financial Statement Comparability in China

In this study, we investigate whether individual auditors have their own styles by examining their clients' financial statement comparability based on a sample from China. We first confirm the existence of an office-level auditor style (Francis et al. 2014) in China. More importantly, we show that individual auditors significantly influence their client firms' financial statement comparability, incremental to the audit office effect. The results are robust to alternative comparability measures, various sampling methods, and different approaches used to address potential endogeneity. We also find that individual auditor style is stronger when individual auditors are affiliated with international Big 4 auditing firms (compared with local Big 6 firms) and when they are industry experts. Our study highlights the importance of individual auditors as micro-level institutions in promoting financial statement comparability, and provides implications for both investors and regulators