Abstract

We hypothesize that if individual auditors possessunique audit styles that they consistently apply to different auditengagements, client firms with a common signing auditor will exhibit higherearnings comparability. Using a large sample of Chinese firms with dataavailable on signing auditors’ identities, we find that client firms reportmore comparable earnings when they are audited by the same individual auditorthan when they are audited by (1) a different audit firm, (2) the same auditfirm but a different audit office, and (3) the same audit office but adifferent individual auditor. In addition, we document that the effect ofindividual auditor style on earnings comparability is more pronounced for largeaudit firms, in the post-IFRS period, and when the individual auditor has morestable teamwork experience. Overall, our results highlight an important role ofthe individual auditor in facilitating earnings comparability.