Auditor and Client Induced Audit Quality Threats and Financial Reporting Quality

This study extends the existing literature examining audit quality to better understand how auditor and client induced threats influence audit quality. It does this by investigating four key elements – audit partner busyness, client economic importance, auditor-director and auditor-audit committee member interlocks, and gender, using client accruals-based and real earnings management as the measure of audit quality. The sample includes UK public and private companies. The findings of this study have several implications for audit firms, audit professionals, professional accounting bodies, policymakers, regulators of the market for audit services, and boards of directors interested in improving corporate governance, including audit quality.