AAA Contact:
David Twiddy,
Author Contacts:
Matthew Sherwood,
Albert Nagy,
Aleksandra Zimmerman,

December 1, 2020

Offices With More Non-CPA Staff Boast Higher Quality Audits


For decades, there has been debate within the business community on the role consulting practices may have on the quality and performance of public accounting firm audit practices. A new study finds that “Big Four” offices with more non-CPAs on staff are also the offices that perform higher quality audits.

“The issue of separating auditing services from consulting services in accounting firms has been around for more than 50 years,” says Albert Nagy, co-author of the study and a professor of accounting at John Carroll University. “Accounting regulators in the United Kingdom have already taken action to force large firms to split those functions into separate businesses – and United States regulators take great interest in the consulting services provided by large accounting firms.

“But our findings suggest that having an array of specializations in these large firms serves to improve the quality of their audits, rather than hurting them. It’s actually beneficial to the audits.”

At its core, the longstanding question in the business community has been whether advisory and consulting services distract an accounting firm from its core business of auditing. To address this question, researchers looked at office-level data from accounting firms in dozens of metropolitan areas across the U.S. The researchers focused on offices of the “Big Four” accounting firms.

For each of the metropolitan areas in the study, researchers made use of publicly available information to determine the overall number of employees in each Big Four office, as well as the percentage of office employees that are non-CPAs. The researchers then evaluated thousands of audits from these offices from 2009-2014. The researchers were looking for proxies of poor audit quality, such as restatements – which stem from errors in financial statements that auditors failed to identify before the statements were first issued. The fewer the number of restatements, the higher the quality of the audits. The authors also examined client earnings management as a proxy for audit quality.

“Put simply, we find that greater access to non-CPAs in the office is associated with higher audit quality,” says Aleksandra Zimmerman, co-author of the study and an assistant professor of accounting at Florida State University.

“This likely stems from the fact that auditors often call on the assistance of non-accounting specialists to help complete audit procedures and gather audit evidence to support the audit opinion,” Nagy says. “These non-CPA personnel can include IT specialists, actuaries, engineers, lawyers, data scientists, climate specialists, real estate appraisers, healthcare specialists, and so on.”

“Given the complexity of today’s business environment, our results suggest that audit firm offices with greater availability of non-CPAs to support audit teams are better equipped to provide high-quality audits,” says Matthew Sherwood, corresponding author of the study and an assistant professor of accounting at the University of Massachusetts Amherst. “They simply have access to a wider range of expertise.”

“We also think it’s important to note that we did not find any evidence that having more non-CPAs in an office decreased the independence of that office’s audits,” Zimmerman says.

As for which types of non-CPA expertise are most valuable, the researchers say that’s still unclear.

“We did not have access to that level of data but think it would be extremely interesting to determine which types of expertise – or which combinations of expertise – contributed most to audit quality,” Sherwood says. “That data would require additional buy-in from regulators or firms.”

The paper, “Non-CPAs and Office Audit Quality,” is published in the journal Accounting Horizons.

The American Accounting Association ( is the largest community of accountants in academia. Founded in 1916, we have a rich and reputable history built on leading-edge research and publications. The diversity of our membership creates a fertile environment for collaboration and innovation. Collectively, we shape the future of accounting through teaching, research and a powerful network, ensuring our position as thought leaders in accounting.