Audit Staff Satisfaction and Audit Quality: Evidence from the Private Client Market Segment

Figures & data

Table 1. Sample

Panel A: Sample selection
					Client-Years	Clients	Audit Firms	Audit Offices
Initial Sample: Private limited-liability clients with data for key financial variables during the period 2010–2018					102,246	14,589
Less Financial Firms, Public Utilities and Non-Profit Organizations					77,722	11,319
Only observations from medium-sized and large clients based on GCC criteria					70,837	10,339
Clients with auditor information (i.e., audit firm/office, audit opinion, (non-)audit fees)					12,744	1,565
Only clients from large audit firms (based on revenue and number of employees)					8,487	1,382	30	213
Only audit offices with sufficient employee reviews (at least 5 reviews per office)					7,134	1,168	28	104
Main Sample: Non-missing values for other variables (e.g., abnormal accruals, control variables)					4,425	967	25	99
ETR Sample: Non-missing values for measuring firms’ effective tax rate and additional controls (e.g., local municipal tax rate)					2,898	760	23	93
Panel B: Annual Distribution
Year	Freq.	%	Year	Freq.	%	Year	Freq.	%
2010	460	10.40	2013	437	9.88	2016	470	10.62
2011	486	10.98	2014	460	10.40	2017	471	10.64
2012	512	11.57	2015	675	15.25	2018	454	10.26
						Total	4,425	100.00
Panel C: Audit Firm Distribution
Audit Firm		Freq.	%	#Offices	Audit Firm	Freq.	%	#Offices
PwC		1107	25.02	13	RWT	32	0.72	1
KPMG		946	21.38	14	Fides	29	0.66	1
Deloitte		855	19.32	10	Kleeberg	29	0.66	1
EY		797	18.01	12	EbnerStolz	26	0.59	5
BDO		136	3.07	9	Bansbach	24	0.54	1
Mazars		71	1.60	4	PSP	17	0.38	1
Rödl		55	1.24	6	Möhrle	15	0.34	1
Curacon		47	1.06	2	RSM	11	0.25	2
PKF		43	0.97	3	Schüllermann	11	0.25	1
Solidaris		42	0.95	1	Dornbach	7	0.16	1
WarthKlein		40	0.90	3	dhpg	7	0.16	1
BakerTilly		38	0.86	4	Ecovis	5	0.11	1
Stückmann		35	0.79	1	Total	4,425	100.00	99

Table 2. Distributional properties

Panel A: Main sample (N = 4,425)
Variables	Mean	SD	P1	P25	P50	P75	P99
$\left|\mathrm{DA}\right|$	0.09	0.11	0.00	0.03	0.06	0.12	0.54
$\left|\mathrm{AWCA}\right|$	0.11	0.15	0.00	0.02	0.05	0.13	0.78
$\mathrm{Staff}\mathrm{\_Satisfaction}$	3.63	0.28	2.91	3.53	3.66	3.79	4.36
$\mathrm{Size}$	11.07	1.02	8.91	10.37	10.93	11.64	13.94
$\mathrm{Size}\mathrm{\_Category}$	0.86	0.35	0.00	1.00	1.00	1.00	1.00
$\mathrm{Change}\mathrm{\_FY}$	0.01	0.08	0.00	0.00	0.00	0.00	0.00
$\mathrm{LLoss}$	0.18	0.39	0.00	0.00	0.00	0.00	1.00
$\mathrm{RoA}$	0.07	0.12	−0.26	0.01	0.06	0.12	0.46
$\mathrm{InvRec}$	0.60	0.26	0.03	0.40	0.63	0.83	0.99
$\mathrm{Lev}$	0.43	0.24	0.03	0.23	0.42	0.62	0.95
$\mathrm{Change}\mathrm{\_Sales}$	0.06	0.45	−1.74	−0.05	0.05	0.19	1.58
$\mathrm{Single}$	0.20	0.40	0.00	0.00	0.00	0.00	1.00
$\mathrm{Firm}\mathrm{\_Independence}$	0.08	0.27	0.00	0.00	0.00	0.00	1.00
$\mathrm{NBS}$	1.33	0.49	0.69	0.69	1.39	1.61	2.30
$\mathrm{Age}$	35.87	26.55	5.00	18.00	28.00	46.00	113.00
$\mathrm{CFO}$	0.08	0.18	−0.52	−0.00	0.08	0.16	0.60
$\mathrm{Lit}\mathrm{\_Risk}$	0.07	0.26	0.00	0.00	0.00	0.00	1.00
$\mathrm{Busy}\mathrm{\_Season}$	0.77	0.42	0.00	1.00	1.00	1.00	1.00
$\mathrm{Big}4$	0.84	0.37	0.00	1.00	1.00	1.00	1.00
$\mathrm{Opinion}$	0.01	0.11	0.00	0.00	0.00	0.00	1.00
$\mathrm{Office}\mathrm{\_Change}$	0.08	0.27	0.00	0.00	0.00	0.00	1.00
$\mathrm{Office}\mathrm{\_Size}$	11.07	0.41	9.89	10.83	11.15	11.35	11.86
$\mathrm{Office}\mathrm{\_Tenure}$	3.98	1.37	1.00	3.00	5.00	5.00	5.00
$\mathrm{Report}\mathrm{\_Lag}$	173.90	122.89	28.00	89.00	140.00	223.00	646.00
Panel B: Tax avoidance sample (N = 2,898)
Variables	Mean	SD	P1	P25	P50	P75	P99
$\mathrm{ETR}$	0.24	0.19	0.00	0.07	0.28	0.33	0.95
$\mathrm{Staff}\mathrm{\_Satisfaction}$	3.65	0.27	2.91	3.53	3.68	3.81	4.36
$\mathrm{Provisions}$	0.19	0.16	0.01	0.07	0.13	0.25	0.78
$\mathrm{PPE}$	0.20	0.22	0.00	0.02	0.11	0.31	0.90
$\mathrm{Municipal}\mathrm{\_Tax}$	412.34	58.94	280.00	360.00	425.00	460.00	510.00

Note: All continuous variables are winsorized at 0.5% tails. The staff satisfaction variable is mean-centred before included into the regressions. Variables are defined in Online Appendix A.

Table 3. Descriptive statistics for audit staff satisfaction

Panel A: Audit staff satisfaction dimensions
Dimensions	Mean	SD	P1	P25	P50	P75	P99
$\mathrm{Working}\mathrm{\_Atmosphere}$	3.68	0.34	2.83	3.51	3.70	3.94	4.45
$\mathrm{Support}\mathrm{\_Management}$	3.49	0.37	2.60	3.26	3.42	3.68	4.50
$\mathrm{Teamwork}$	4.00	0.32	3.25	3.80	4.02	4.15	4.83
$\mathrm{Challenging}\mathrm{\_Work}$	3.81	0.30	2.70	3.69	3.80	4.00	4.45
$\mathrm{Communication}$	3.37	0.38	2.35	3.20	3.35	3.58	4.63
$\mathrm{Gender}\mathrm{\_Equality}$	3.93	0.31	3.12	3.79	3.94	4.14	4.50
$\mathrm{Older}\mathrm{\_Colleagues}$	3.77	0.37	2.71	3.57	3.74	3.98	4.78
$\mathrm{Career}$	3.73	0.35	2.50	3.60	3.74	3.87	4.54
$\mathrm{Compensation}$	3.37	0.31	2.47	3.22	3.35	3.53	4.16
$\mathrm{Work}\mathrm{\_Environment}$	3.74	0.28	2.89	3.64	3.75	3.81	4.59
$\mathrm{Social}\mathrm{\_Consciousness}$	3.46	0.29	2.40	3.38	3.50	3.60	4.00
$\mathrm{Work}\mathrm{\_Life}\mathrm{\_Balance}$	3.11	0.38	2.00	2.88	3.05	3.32	4.13
$\mathrm{Image}$	3.87	0.35	2.67	3.79	3.93	4.06	4.50
Panel B: Audit staff satisfaction Big 4 vs. non-Big 4
Dimensions	Big 4	Non-Big 4	Difference
$\mathrm{Staff}\mathrm{\_Satisfaction}$	3.643	3.586	0.056***
$\mathrm{Working}\mathrm{\_Atmosphere}$	3.671	3.714	−0.043***
$\mathrm{Support}\mathrm{\_Management}$	3.503	3.405	0.099***
$\mathrm{Teamwork}$	4.006	3.986	0.020
$\mathrm{Challenging}\mathrm{\_Work}$	3.809	3.804	0.005
$\mathrm{Communication}$	3.389	3.277	0.112***
$\mathrm{Gender}\mathrm{\_Equality}$	3.947	3.826	0.121***
$\mathrm{Older}\mathrm{\_Colleagues}$	3.724	3.998	−0.274***
$\mathrm{Career}$	3.769	3.528	0.241***
$\mathrm{Compensation}$	3.388	3.288	0.100***
$\mathrm{Work}\mathrm{\_Environment}$	3.755	3.682	0.073***
$\mathrm{Social}\mathrm{\_Consciousness}$	3.491	3.286	0.205***
$\mathrm{Work}\mathrm{\_Life}\mathrm{\_Balance}$	3.063	3.354	−0.291***
$\mathrm{Image}$	3.939	3.545	0.394***
Panel C: Audit staff satisfaction based on office size
Dimensions	Large Office	Small Office	Difference
$\mathrm{Staff}\mathrm{\_Satisfaction}$	3.590	3.678	−0.088***
$\mathrm{Working}\mathrm{\_Atmosphere}$	3.601	3.755	−0.154***
$\mathrm{Support}\mathrm{\_Management}$	3.429	3.546	−0.117***
$\mathrm{Teamwork}$	3.950	4.055	−0.104***
$\mathrm{Challenging}\mathrm{\_Work}$	3.760	3.857	−0.097***
$\mathrm{Communication}$	3.324	3.418	−0.094***
$\mathrm{Gender}\mathrm{\_Equality}$	3.890	3.966	−0.076***
$\mathrm{Older}\mathrm{\_Colleagues}$	3.653	3.885	−0.232***
$\mathrm{Career}$	3.728	3.731	−0.003
$\mathrm{Compensation}$	3.331	3.414	−0.083***
$\mathrm{Work}\mathrm{\_Environment}$	3.724	3.763	−0.039***
$\mathrm{Social}\mathrm{\_Consciousness}$	3.459	3.456	0.003
$\mathrm{Work}\mathrm{\_Life}\mathrm{\_Balance}$	2.993	3.228	−0.235***
$\mathrm{Image}$	3.922	3.827	0.095***

Note: $\ast \ast \ast ,\ast \ast ,\ast$ indicate two-sided significance at the 0.01, 0.05 and 0.1 levels based on a t-test, respectively.

Table 4. Main analyses

Dep. Variable:	(1) $\left|\mathrm{DA}\right|$		(2) $\left|\mathrm{AWCA}\right|$		(3) $\mathrm{ETR}$
$\mathrm{Staff}\mathrm{\_Satisfaction}$	−0.012*	(−1.86)	−0.014*	(−1.90)	−0.044**	(−2.05)
$\mathrm{Size}$	−0.001	(−0.66)	−0.002	(−0.65)	−0.011	(−1.41)
$\mathrm{Size}\mathrm{\_Category}$	−0.012*	(−1.84)	−0.023***	(−2.81)	−0.001	(−0.04)
$\mathrm{Change}\mathrm{\_FY}$	−0.019	(−1.17)	0.056*	(1.81)	−0.043	(−1.25)
$\mathrm{LLoss}$	0.008	(1.63)	0.025***	(3.36)	−0.075***	(−5.18)
$\mathrm{RoA}$	0.076**	(2.06)	−0.045	(−1.29)	−0.233***	(−3.94)
$\mathrm{InvRec}$	0.029***	(3.30)	0.052***	(3.88)	0.015	(0.57)
$\mathrm{Lev}$	0.046***	(5.30)	0.036***	(2.99)	−0.128***	(−4.84)
$\mathrm{Change}\mathrm{\_Sales}$	0.012**	(2.05)	0.027***	(3.16)	0.008	(1.19)
$\mathrm{Single}$	−0.001	(−0.21)	0.005	(0.77)	0.004	(0.23)
$\mathrm{Firm}\mathrm{\_Independence}$	0.003	(0.51)	−0.003	(−0.38)	0.052**	(2.17)
$\mathrm{NBS}$	−0.006	(−1.23)	−0.003	(−0.55)	−0.001	(−0.12)
$\mathrm{Age}$	−0.000**	(−2.19)	0.000	(0.47)	−0.000	(−1.63)
$\mathrm{CFO}$	−0.066**	(−2.10)	0.019	(0.69)	−0.118***	(−4.64)
$\mathrm{Lit}\mathrm{\_Risk}$	−0.019	(−1.28)	0.014	(0.71)	0.074**	(2.37)
$\mathrm{Busy}\mathrm{\_Season}$	0.001	(0.09)	−0.001	(−0.19)	−0.005	(−0.37)
$\mathrm{Big}4$	0.005	(0.86)	0.020**	(2.54)	−0.035*	(−1.68)
$\mathrm{Opinion}$	0.014	(0.67)	−0.012	(−0.60)	0.030	(1.11)
$\mathrm{Office}\mathrm{\_Change}$	0.012	(1.54)	−0.026**	(−2.56)	−0.025	(−1.56)
$\mathrm{Office}\mathrm{\_Size}$	0.000	(0.06)	−0.004	(−0.56)	−0.015	(−0.84)
$\mathrm{Office}\mathrm{\_Tenure}$	−0.001	(−0.69)	−0.007***	(−2.89)	−0.003	(−0.68)
$\mathrm{Report}\mathrm{\_Lag}$	0.000	(1.21)	0.000	(0.77)	−0.000	(−0.81)
$\mathrm{Provisions}$					−0.062	(−1.49)
$\mathrm{PPE}$					0.048	(1.27)
$\mathrm{Municipal}\mathrm{\_Tax}$					−0.000	(−1.16)
Year Fixed Effects	Included		Included		Included
Industry Fixed Effects	Included		Included		Included
N	4,425		4,425		2,898
Adj. $R^2$ (in %)	9.50		12.85		15.32

Note: $\ast \ast \ast ,\ast \ast ,\ast$ indicate two-sided significance at the 0.01, 0.05 and 0.1 levels, respectively. Robust t-statistics, clustered at the client-level, are presented in parentheses. Variables are defined in Online Appendix A.

Table 5: Private vs. listed firm setting

Panel A: Discretionary accruals
Dep. Variable: $\left|\mathrm{DA}\right|$	(1) Private		(2) Listed
$\mathrm{Staff}\mathrm{\_Satisfaction}$	−0.012*		−0.000
	(−1.86)		(−0.02)
p-value Difference		0.58
Control Variables	Included		Included
Year Fixed Effects	Included		Included
Industry Fixed Effects	Included		Included
N	4,425		447
Adj. $R^2$ (in %)	9.50		17.35
Panel B: Abnormal working capital accruals
Dep. Variable: $\left|\mathrm{AWCA}\right|$	(1) Private		(2) Listed
$\mathrm{Staff}\mathrm{\_Satisfaction}$	−0.014*		0.012
	(−1.90)		(0.91)
p-value Difference		0.08
Control Variables	Included		Included
Year Fixed Effects	Included		Included
Industry Fixed Effects	Included		Included
N	4,425		447
Adj. $R^2$ (in %)	12.85		20.74
Panel C: Tax aggressiveness
Dep. Variable: $\mathrm{ETR}$	(1) Private		(2) Listed
$\mathrm{Staff}\mathrm{\_Satisfaction}$	−0.044**		0.117
	(−2.05)		(1.12)
p-value Difference		0.10
Control Variables	Included		Included
Year Fixed Effects	Included		Included
Industry Fixed Effects	Included		Included
N	2,898		427
Adj. $R^2$ (in %)	15.32		3.58

Note: $\ast \ast \ast ,\ast \ast ,\ast$ indicate two-sided significance at the 0.01, 0.05 and 0.1 levels. Robust t-statistics, clustered at the client-level, are presented in parentheses. Seemingly unrelated regressions are conducted to test for the equality of coefficients (p-values based on z-statistics). Variables are defined in Online Appendix A.

Table 6. Big 4 vs. non-Big 4.

Panel A: Discretionary accruals
Dep. Variable: $\left|\mathrm{DA}\right|$	(1) Big 4		(2) Non-Big 4
$\mathrm{Staff}\mathrm{\_Satisfaction}$	−0.009		−0.016*
	(−0.89)		(−1.81)
p-value Difference		0.53
Control Variables	Included		Included
Year Fixed Effects	Included		Included
Industry Fixed Effects	Included		Included
N	3,705		720
Adj. $R^2$ (in %)	8.94		12.25
Panel B: Abnormal working capital accruals
Dep. Variable: $\left|\mathrm{AWCA}\right|$	(1) Big 4		(2) Non-Big 4
$\mathrm{Staff}\mathrm{\_Satisfaction}$	−0.005		−0.015
	(−0.53)		(−1.57)
p-value Difference		0.36
Control Variables	Included		Included
Year Fixed Effects	Included		Included
Industry Fixed Effects	Included		Included
N	3,705		720
Adj. $R^2$ (in %)	11.29		12.26
Panel C: Tax aggressiveness
Dep. Variable: $\mathrm{ETR}$	(1) Big 4		(2) Non-Big 4
$\mathrm{Staff}\mathrm{\_Satisfaction}$	0.002		−0.056
	(0.07)		(−1.49)
p-value Difference		0.06
Control Variables	Included		Included
Year Fixed Effects	Included		Included
Industry Fixed Effects	Included		Included
N	2,436		462
Adj. $R^2$ (in %)	15.39		39.53

Note: $\ast \ast \ast ,\ast \ast ,\ast$ indicate two-sided significance at the 0.01, 0.05 and 0.1 levels. Robust t-statistics, clustered at the client-level, are presented in parentheses. Seemingly unrelated regressions are conducted to test for the equality of coefficients (reported p-values based on z-statistics). Variables are defined in Online Appendix A.

Table 7. Audit staff satisfaction and the role of non-audit services and auditor tenure

Panel A: Non-audit services
Dep. Variable:	(1) $\left|\mathrm{DA}\right|$	(2) $\left|\mathrm{AWCA}\right|$	(3) $\mathrm{ETR}$
$\mathrm{Staff}\mathrm{\_Satisfaction}$	0.006	0.001	−0.037
	(0.63)	(0.04)	(−1.08)
$\mathrm{NAS}\mathrm{\_Ratio}$	0.005	0.027**	0.064***
	(0.57)	(2.11)	(2.94)
$\mathrm{Staff}\mathrm{\_Satisfaction}\ast \mathrm{NAS}\mathrm{\_Ratio}$	−0.075***	−0.065	−0.036
	(−2.71)	(−1.61)	(−0.40)
Control Variables	Included	Included	Included
Year Fixed Effects	Included	Included	Included
Industry Fixed Effects	Included	Included	Included
N	4,425	4,425	2,898
Adj. $R^2$	9.64	13.02	15.81
Panel B: Audit office tenure
Dep. Variable:	(1) $\left|\mathrm{DA}\right|$	(2) $\left|\mathrm{AWCA}\right|$	(3) $\mathrm{ETR}$
$\mathrm{Staff}\mathrm{\_Satisfaction}$	0.021	0.009	−0.155***
	(1.28)	(0.56)	(−3.04)
$\mathrm{Office}\mathrm{\_Tenure}$	−0.001	−0.002	−0.003
	(−0.65)	(−1.15)	(−0.82)
$\mathrm{Staff}\mathrm{\_Satisfaction}\ast \mathrm{Office}\mathrm{\_Tenure}$	−0.009**	−0.004	−0.028**
	(−2.18)	(−1.08)	(−2.27)
Control Variables	Included	Included	Included
Year Fixed Effects	Included	Included	Included
Industry Fixed Effects	Included	Included	Included
N	4,425	4,425	2,898
Adj. $R^2$	9.58	12.88	15.57

Note: $\ast \ast \ast ,\ast \ast ,\ast$ indicate two-sided significance at the 0.01, 0.05 and 0.1 levels, respectively. Robust t-statistics, clustered at the client-level, are presented in parentheses. Variables are defined in Online Appendix A.

Table 8. Individual staff satisfaction dimensions.

Dep. Variable:	(1) $\left|\mathrm{DA}\right|$	(2) $\left|\mathrm{AWCA}\right|$	(3) $\mathrm{ETR}$
$\mathrm{Working}\mathrm{\_Atmosphere}$	−0.010*	−0.013**	−0.034*
	(−1.88)	(−2.09)	(−1.89)
$\mathrm{Support}\mathrm{\_Management}$	−0.010*	−0.017***	−0.031*
	(−1.88)	(−2.83)	(−1.87)
$\mathrm{Teamwork}$	−0.007	−0.016***	−0.026
	(−1.18)	(−2.40)	(−1.35)
$\mathrm{Challenging}\mathrm{\_Work}$	−0.008	−0.111	−0.030
	(−1.41)	(−1.54)	(−1.42)
$\mathrm{Communication}$	−0.012**	−0.014***	−0.045***
	(−2.57)	(−2.64)	(−2.82)
$\mathrm{Gender}\mathrm{\_Equality}$	−0.010	−0.009	−0.027
	(−1.50)	(−1.18)	(−1.48)
$\mathrm{Older}\mathrm{\_Colleagues}$	−0.004	0.001	−0.004
	(−0.78)	(0.22)	(−0.21)
$\mathrm{Career}$	−0.014**	−0.107*	−0.034*
	(−2.25)	(−1.70)	(−1.93)
$\mathrm{Compensation}$	−0.009	−0.010	−0.029
	(−1.60)	(−1.39)	(−1.55)
$\mathrm{Work}\mathrm{\_Environment}$	−0.007	−0.003	−0.038*
	(−1.17)	(−0.40)	(−1.75)
$\mathrm{Social}\mathrm{\_Consciousness}$	−0.005	−0.009	−0.042*
	(−0.94)	(−1.32)	(−1.94)
$\mathrm{Work}\mathrm{\_Life}\mathrm{\_Balance}$	−0.006	−0.014**	−0.029*
	(−1.33)	(−2.27)	(−1.79)
$\mathrm{Image}$	−0.008	−0.004	−0.050***
	(−1.40)	(−0.64)	(−2.81)

Note: This table presents results for our models with considering the individual employee satisfaction dimensions.We run each model for each individual dimension separately. Hence, the coefficients presented in the cells are based on 39 seperate regressions with controls and fixed effects. $\ast \ast \ast ,\ast \ast ,\ast$ indicate two-sided significance at the 0.01, 0.05 and 0.1 levels, respectively. Robust t-statistics, clustered at the client-level, are presented in parentheses. Variables are defined in Online Appendix A.

Table 9. Time-variant audit staff satisfaction measures.

Panel A: Rolling 5-year window
Dep. Variable:	(1) $\left|\mathrm{DA}\right|$	(2) $\left|\mathrm{AWCA}\right|$	(3) $\mathrm{ETR}$
$\mathrm{Staff}\mathrm{\_Satisfaction}$	−0.009	−0.020**	−0.030
	(−1.44)	(−2.06)	(−1.48)
Control Variables	Included	Included	Included
Year Fixed Effects	Included	Included	Included
Industry Fixed Effects	Included	Included	Included
N	2,333	2,333	1,581
Adj. $R^2$	7.89	13.39	12.85
Panel B: Only reviews from current and previous years
Dep. Variable:	(1) $\left|\mathrm{DA}\right|$	(2) $\left|\mathrm{AWCA}\right|$	(3) $\mathrm{ETR}$
$\mathrm{Staff}\mathrm{\_Satisfaction}$	−0.008*	−0.009*	−0.012
	(−1.82)	(−1.68)	(−1.16)
Control Variables	Included	Included	Included
Year Fixed Effects	Included	Included	Included
Industry Fixed Effects	Included	Included	Included
N	3,427	3,427	2,295
Adj. $R^2$	9.62	11.46	14.34

Note: $\ast \ast \ast ,\ast \ast ,\ast$ indicate two-sided significance at the 0.01, 0.05 and 0.1 levels, respectively. Robust t-statistics, clustered at the client-level, are presented in parentheses. Variables are defined in Online Appendix A.

Table 10: Other additional tests

Panel A: Exclude reviews from former employees
Dep. Variable:	(1) $\left|\mathrm{DA}\right|$	(2) $\left|\mathrm{AWCA}\right|$	(3) $\mathrm{ETR}$
$\mathrm{Staff}\mathrm{\_Satisfaction}$	−0.014*	−0.003	−0.036
	(−1.71)	(−0.28)	(−1.38)
Control Variables	Included	Included	Included
Year Fixed Effects	Included	Included	Included
Industry Fixed Effects	Included	Included	Included
N	4,111	4,111	2,726
Adj. $R^2$	9.11	12.58	14.79
Panel B: Only reviews from audit-service-related employees
Dep. Variable:	(1) $\left|\mathrm{DA}\right|$	(2) $\left|\mathrm{AWCA}\right|$	(3) $\mathrm{ETR}$
$\mathrm{Staff}\mathrm{\_Satisfaction}$	−0.015*	−0.018*	−0.049*
	(−1.82)	(−1.84)	(−1.90)
Control Variables	Included	Included	Included
Year Fixed Effects	Included	Included	Included
Industry Fixed Effects	Included	Included	Included
N	3,940	3,940	2,636
Adj. $R^2$	8.48	12.42	15.53
Panel C: Audit firm fixed effects
Dep. Variable:	(1) $\left|\mathrm{DA}\right|$	(2) $\left|\mathrm{AWCA}\right|$	(3) $\mathrm{ETR}$
$\mathrm{Staff}\mathrm{\_Satisfaction}$	−0.014*	−0.014	−0.040
	(−1.81)	(−1.63)	(−1.61)
Control Variables	Included	Included	Included
Year Fixed Effects	Included	Included	Included
Industry Fixed Effects	Included	Included	Included
Audit Firm Fixed Effects	Included	Included	Included
N	4,425	4,425	2,898
Adj. $R^2$	9.41	12.84	17.69
Panel D: Audit staff satisfaction at firm-level
Dep. Variable:	(1)	(2)	(3)
	$\left|\mathrm{DA}\right|$	$\left|\mathrm{AWCA}\right|$	$\mathrm{ETR}$
$\mathrm{Staff}\mathrm{\_Satisfaction}$	−0.012*	−0.003	−0.042*
	(−1.84)	(−0.32)	(−1.86)
Control Variables	Included	Included	Included
Year Fixed Effects	Included	Included	Included
Industry Fixed Effects	Included	Included	Included
N	4,425	4,425	2,898
Adj. $R^2$	9.46	12.79	15.23
$\mathrm{Staff}\mathrm{\_Satisfaction}$	−0.009	−0.013*	−0.014
	(−1.41)	(−1.78)	(−1.33)
Control Variables	Included	Included	Included
Year Fixed Effects	Included	Included	Included
Industry Fixed Effects	Included	Included	Included
N	3,482	3,591	2,245
Adj. $R^2$	12.21	15.41	50.20

Note: $\ast \ast \ast ,\ast \ast ,\ast$ indicate two-sided significance at the 0.01, 0.05 and 0.1 levels, respectively. Robust t-statistics, clustered at the client-level, are presented in parentheses. Variables are defined in Online Appendix A.

Data Availability

Data are available from the public sources cited in the text.