Accounting

Business

Internal audit

Walk-through test

Audit

Earnings

Epistemology

Psychiatry

Philosophy

Quality audit

Cognition

Audit evidence

Management

Psychology

Economics

Control (management)

Joint audit

Quality (philosophy)

Accrual

Audit plan

Contemporary Accounting Research

ABSTRACT This study examines the role of an individual auditor's cognitive ability in delivering high‐quality audits. Our results from analyzing archival data from Sweden show that audit partners' IQ scores obtained from psychological tests are positively associated with going‐concern audit reporting accuracy and audit fee premiums. We also find some, albeit weak, evidence that audit partners' IQ scores are negatively associated with the income‐increasing abnormal accruals of the client. These results suggest that, although audit services are standardized through various control mechanisms and audits are conducted by teams rather than by individual auditors, the cognitive ability of audit partners responsible for an audit remains important in delivering high‐quality audit services.

IQ and Audit Quality: Do Smarter Auditors Deliver Better Audits?