The impact of auditor education level on the relationship between auditor busyness and audit quality in Turkey

Figures & data

Table 1. Descriptive statistics and univariate analysis

	Whole sample		Postgraduate = 0		Postgraduate = 1		Mean difference
Variables	Mean	Std. Dev.	Mean	Std. Dev.	Mean	Std. Dev.
Modified	0.102	0.303	0.095	0.293	0.134	0.341	−1.88**
Agg	−0.004	0.278	−0.0008	0.008	−0.019	0.017	0.95
AuditorBusy	5.351	3.594	5.256	0.108	5.750	0.226	−1.99**
LogAuditorBusy	1.450	0.713	1.435	0.021	1.509	0.046	−1.49**
Postgraduate	0.193	0.395	‒	‒	‒	‒
TenureA	2.242	1.388	3.153	0.059	3.065	0.120	0.65
Big4	0.564	0.496	0.612	0.014	0.361	0.029	7.48***
LogSize	19.53	1.748	19.62	0.053	19.19	0.106	3.56***
MTB	0.022	0.039	0.022	0.001	0.021	0.003	0.45
Leverage	0.484	0.232	0.487	0.007	0.472	0.014	0.91
Growth	0.425	5.967	0.480	0.201	0.197	0.050	0.68
InvRec	0.336	0.198	0.337	0.005	0.332	0.012	0.38
LogAge	3.503	0.521	3.516	0.015	3.446	0.034	1.93**
ROA	0.035	0.100	0.034	0.002	0.022	0.006	1.78**
Loss	0.296	0.454	0.293	0.013	0.276	0.027	0.54
Obs.	1,342	1,342	1,082	1,082	260	260

Table 2. Number of clients of auditors, auditors with post-graduate degree, auditors with Bachelor’s degree

No. of C.	2010			2011			2012			2013			2014			2015			2016			Total
	T	1	0	T	1	0	T	1	0	T	1	0	T	1	0	T	1	0	T	1	0	T	1	0
1	20	4	16	22	3	19	19	4	15	22	3	19	17	5	12	18	5	13	25	6	19	143	30	113
2	9	1	8	16	6	10	26	3	23	23	6	17	20	3	17	26	5	21	15	1	14	135	26	109
3	26	5	21	11	7	4	15	3	12	25	6	19	28	5	23	21	0	21	23	5	18	149	31	118
4	17	5	12	33	4	29	22	0	22	32	2	30	34	2	32	36	4	32	42	0	42	216	17	199
5	16	4	12	8	0	8	46	9	37	25	3	22	26	0	26	27	2	25	21	5	16	169	23	146
6	24	2	22	26	8	18	21	7	14	12	0	12	22	3	19	22	10	12	7	0	7	134	30	104
7	27	14	13	10	4	6	11	0	11	29	4	25	10	3	7	15	0	15	21	0	21	123	25	98
8	7	5	2	19	6	13	5	5	0	6	4	2	6	0	6	12	4	8	13	0	13	68	24	44
9	3	0	3	20	6	14	14	6	8	12	5	7	21	6	15	1	0	1	10	0	10	81	23	58
10	-	-	-	8	5	3	-	-	-	10	7	3	-	-	-	11	0	11	16	5	11	45	17	28
11	-	-	-	-	-	-	5	0	5	-	-	-	-	-	-	-	-	-	12	5	7	17	5	12
13	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	11	0	11	-	-	-	11	0	11
14	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	4	0	4	4	0	4
16	-	-	-	-	-	-	-	-	-	10	0	10	-	-	-	-	-	-	-	-	-	10	0	10
17	-	-	-	-	-	-	13	0	13	-	-	-	4	4	0	-	-	-	-	-	-	17	4	13
18	-	-	-	-	-	-	-	-	-	-	-	-	-	-	-	5	5	0	-	-	-	5	5	0
20	-	-	-	-	-	-	-	-	-	-	-	-	15	0	15	-	-	-	-	-	-	15	0	15
Total	149	40	109	173	49	124	197	37	160	206	41	165	203	31	172	205	35	170	209	27	182	1,342	260	1,082

Note: T: Total Number of auditors, 1: Auditors with post-graduate degree, 0: Auditors with bachelor’s degree, No. of C.: Number of Clients.

Table 3. Correlation matrix

	Modified	Agg	AuditorBusy	LogAuditorBusy	Postgraduate	TenureA	Big4	Leverage	Growth	Invrec	MTB	LogSize	Loss	ROA	LogAge
Modified	1
Agg	−0.933***	1
AuditorBusy	−0.0665**	0.0601**	1
LogAuditorBusy	−0.0895***	0.0649**	0.900***	1
Postgraduate	0.0547**	−0.0407	0.051*	0.0363	1
TenureA	−0.0876***	0.0400	−0.027	−0.008	−0.0114	1
Big4	−0.147***	0.0344	−0.006	0.162***	−0.170***	0.116***	1
Leverage	0.0233	−0.0130	−0.0477*	−0.028	−0.0191	0.0448*	0.0569**	1
Growth	0.0465*	−0.0507*	−0.0282	−0.027	−0.0186	0.110***	−0.009	0.0124	1
Invrec	−0.0847***	0.0769***	0.0309	0.0224	−0.0155	0.0191	−0.0581**	0.212***	0.012	1
MTB	−0.0282	0.0397	−0.009	−0.002	−0.0111	0.0158	0.141***	0.162***	−0.001	0.0232	1
LogSize	−0.228***	−0.0301	−0.007	0.0783***	−0.0868***	0.176***	0.467***	0.241***	−0.047*	−0.104***	0.0137	1
Loss	0.164***	−0.0164	−0.0518*	−0.067**	−0.0152	−0.0405	−0.134***	0.307***	0.052**	−0.130***	0.0435	−0.207***	1
ROA	−0.146***	0.0196	0.0749***	0.090***	−0.0183	0.0474*	0.201***	−0.436***	−0.055**	0.0687***	0.00462	0.193***	−0.774***	1
LogAge	−0.0635**	0.0299	−0.026	0.062**	−0.0356	0.123***	0.348***	−0.0551**	−0.033	−0.0251	0.0665**	0.254***	−0.09***	0.148***	1

Note: * p < 0.10, ** p < 0.05, *** p < 0.01.

Table 4. Results for busyness, education level and interaction variables

	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)
Variables	Modified	Modified	Modified	Modified	Agg	Agg	Agg	Agg
Constant	6.745***	6.680***	6.991***	6.886***	0.216**	0.209*	0.212**	0.203*
	(2.069)	(2.066)	(2.073)	(2.072)	(0.107)	(0.108)	(0.107)	(0.108)
AuditorBusy	−0.0791***		−0.127***		0.00346***		0.00471***
	(0.0291)		(0.0375)		(0.00126)		(0.00140)
LogAuditorBusy		−0.362***		−0.512***		0.0173***		0.0219***
		(0.130)		(0.153)		(0.00632)		(0.00705)
Postgraduate	0.464*	0.458*	−0.299	−0.293	−0.0222*	−0.0225*	0.0139	0.0105
	(0.241)	(0.241)	(0.406)	(0.475)	(0.0117)	(0.0117)	(0.0214)	(0.0253)
AuditorBusy*Postgraduate			0.148**				−0.00639**
			(0.0613)				(0.00316)
LogAuditorBusy*Postgraduate				0.551*				−0.0223
				(0.292)				(0.0152)
TenureA	−0.171***	−0.169***	−0.172***	−0.170***	0.00606**	0.00604**	0.00591**	0.00596**
	(0.0633)	(0.0632)	(0.0637)	(0.0634)	(0.00247)	(0.00247)	(0.00247)	(0.00247)
Big4	−0.106	−0.0410	−0.0973	−0.0317	0.0111	0.00701	0.0128	0.00774
	(0.248)	(0.252)	(0.249)	(0.253)	(0.0110)	(0.0111)	(0.0110)	(0.0111)
Leverage	1.361**	1.376**	1.386**	1.411***	−0.0218	−0.0222	−0.0220	−0.0229
	(0.537)	(0.537)	(0.541)	(0.538)	(0.0263)	(0.0263)	(0.0263)	(0.0263)
Growth	0.0276*	0.0276*	0.0268*	0.0271*	−0.00187**	−0.00187**	−0.00183**	−0.00185**
	(0.0155)	(0.0150)	(0.0153)	(0.0147)	(0.000770)	(0.000770)	(0.000770)	(0.000770)
Invrec	−3.440***	−3.379***	−3.605***	−3.511***	0.0789***	0.0786***	0.0812***	0.0804***
	(0.640)	(0.637)	(0.652)	(0.646)	(0.0267)	(0.0267)	(0.0267)	(0.0267)
MTB	−2.405	−2.459	−2.119	−2.298	0.136	0.142	0.124	0.132
	(3.316)	(3.289)	(3.306)	(3.335)	(0.118)	(0.119)	(0.118)	(0.119)
LogSize	−0.526***	−0.527***	−0.517***	−0.524***	−0.00804**	−0.00816**	−0.00825**	−0.00826**
	(0.0930)	(0.0930)	(0.0928)	(0.0928)	(0.00397)	(0.00397)	(0.00397)	(0.00397)
Loss	0.574	0.576	0.556	0.555	−0.00193	−0.00173	−0.00213	−0.00168
	(0.353)	(0.353)	(0.355)	(0.355)	(0.0158)	(0.0158)	(0.0157)	(0.0158)
ROA	0.414	0.366	0.263	0.278	−0.0225	−0.0172	−0.0269	−0.0209
	(2.675)	(2.675)	(2.688)	(2.677)	(0.116)	(0.116)	(0.116)	(0.116)
LogAge	−0.213	−0.167	−0.288	−0.204	0.0137	0.0129	0.0146	0.0134
	(0.198)	(0.195)	(0.205)	(0.200)	(0.0101)	(0.0101)	(0.0101)	(0.0101)
Year Fixed	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Sector Fixed	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Clustered by Firm	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Observations	1,342	1,342	1,342	1,342	1,342	1,342	1,342	1,342
Pseudo R^2 & R^2	0.205	0.204	0.211	0.208	0.035	0.035	0.038	0.036
LR Chi^2 & F Value	187.10***	186.72***	192.79***	190.33***	2.01***	2.00***	2.09***	2.01***

Note: * p < 0.10, ** p < 0.05, *** p < 0.01.

Table 5. Results for subsamples (less educated auditors vs. more educated auditors)

	(9) Postgraduate = 0	(10) Postgraduate = 0	(11) Postgraduate = 1	(12) Postgraduate = 1	(13) Postgraduate = 0	(14) Postgraduate = 0	(15) Postgraduate = 1	(16) Postgraduate = 1
Variables	Modified	Modified	Modified	Modified	Agg	Agg	Agg	Agg
Constant	9.439***	9.256***	13.96**	14.63**	−0.0675	−0.0723	0.118	0.0935
	(2.220)	(2.218)	(6.189)	(6.240)	(0.164)	(0.164)	(0.334)	(0.334)
AuditorBusy	−0.145***		0.0266		0.00879***		−0.000356
	(0.0399)		(0.0685)		(0.00237)		(0.00510)
LogAuditorBusy		−0.581***		−0.0642		0.0448***		0.0136
		(0.160)		(0.360)		(0.0121)		(0.0255)
TenureA	−0.273***	−0.271***	0.346**	0.353**	0.0164***	0.0165***	−0.0180*	−0.0179*
	(0.0763)	(0.0757)	(0.166)	(0.169)	(0.00466)	(0.00466)	(0.0107)	(0.0106)
Big4	0.120	0.209	−0.663	−0.558	0.00723	−0.00441	0.0427	0.0364
	(0.286)	(0.291)	(0.812)	(0.828)	(0.0209)	(0.0210)	(0.0444)	(0.0450)
Leverage	0.643	0.643	4.184**	4.112**	0.0168	0.0159	−0.167*	−0.165*
	(0.662)	(0.657)	(1.628)	(1.622)	(0.0510)	(0.0510)	(0.0986)	(0.0985)
Growth	0.0248	0.0255	1.135**	1.119**	−0.00218*	−0.00219*	−0.0803***	−0.0802***
	(0.0177)	(0.0167)	(0.504)	(0.497)	(0.00127)	(0.00127)	(0.0239)	(0.0239)
Invrec	−2.711***	−2.581***	−10.51***	−10.39***	0.0487	0.0489	0.456***	0.451***
	(0.767)	(0.757)	(2.578)	(2.586)	(0.0507)	(0.0508)	(0.117)	(0.117)
MBV	−1.615	−1.883	−29.66	−29.13	0.229	0.248	0.535	0.562
	(3.373)	(3.441)	(18.29)	(17.90)	(0.236)	(0.236)	(0.387)	(0.388)
LogSize	−0.454***	−0.466***	−1.103***	−1.123***	−0.0118	−0.0119	0.00433	0.00446
	(0.105)	(0.106)	(0.292)	(0.294)	(0.00744)	(0.00744)	(0.0163)	(0.0163)
Loss	0.430	0.429	1.622*	1.654*	0.00996	0.0105	−0.0329	−0.0337
	(0.416)	(0.415)	(0.964)	(0.964)	(0.0297)	(0.0297)	(0.0653)	(0.0653)
ROA	−1.546	−1.639	5.827	5.813	0.0297	0.0438	−0.253	−0.245
	(3.144)	(3.138)	(7.313)	(7.300)	(0.220)	(0.220)	(0.455)	(0.455)
LogAge	−0.423*	−0.291	0.534	0.529	0.0310	0.0284	−0.000726	−0.00231
	(0.247)	(0.236)	(0.752)	(0.737)	(0.0195)	(0.0195)	(0.0368)	(0.0369)
Year Fixed	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Sector Fixed	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Clustered by Firm	Yes	Yes	Yes	Yes	Yes	Yes	Yes	Yes
Observations	1,082	1,082	260	260	1,082	1,082	260	260
Pseudo R^2 & R^2	0.209	0.205	0.449	0.448	0.050	0.050	0.146	0.147
LR Chi^2 & F Value	141.48***	138.81***	84.85***	84.73***	2.43***	2.43***	1.76***	1.77***

Note: * p < 0.10, ** p < 0.05, *** p < 0.01.

Table

The number of audit firms between 2010 and 2016
Type	2010	2011	2012	2013	2014	2015	2016	Total
Big4	4	4	4	4	4	4	4	4
Non -Big4	28	32	32	36	35	33	36	59
Total	32	36	36	40	39	37	40	63
The number of auditors between 2010 and 2016
Type	2010	2011	2012	2013	2014	2015	2016	Total
Big4	32	35	40	43	44	46	43	61
Non-Big4	33	40	41	45	40	43	48	90
Total	65	75	82	88	88	89	91	151