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Fri, 11 Jul 2025 16:16:06 -0700
marlon from private IP, post #16601794
/all
it's good to have a white name if ur in accounting
https://www.goingconcern.com/researchers-determine-that-big-4-audit-partners-not-named-michael-or-jennifer-are-more-likely-to-bend-the-rules/?mc_cid=62e494788e&mc_eid=ddbcb92425
Researchers Determine That Big 4 Audit Partners Not Named Michael or Jennifer Are More Likely to Bend the Rules
Posted on July 9, 2025 by Adrienne Gonzalez
Green figure looks out from the queue of beige figures
Here at Going Concern we love academic research, even the kind that makes your eyes start watering with its tedious and unforgiving nerdiness. Today we’ve
found one for you that’s a bit less dorky and more interesting, or so we hope. And I’m not just saying that because it’s about people with uncommon first
names of which I am one (trust I’ll find a way to make this about me at some point in this article regardless).
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According to a recent paper in Contemporary Accounting Research, auditors with “uncommon” names are more likely to allow bending of audit standards.
That’s not to say these engagement partners are outright committing audit sins, to be clear.
First, the abstract:
We examine whether audit partner individualism reduces earnings comparability in the United States. We argue that individualistic audit partners are more likely
to deviate from internal working rules and allow clients more flexibility in making accounting choices, consequently decreasing their clients’ earnings
comparability. Using a novel partner-level measure of individualism, we find that within individual Big 4 audit firms, earnings are less comparable between a
company audited by an individualistic partner and a company audited by a non-individualistic partner, relative to a pair of companies that are each audited by a
non-individualistic partner. Our inferences are robust to a changes analysis, a falsification test, and a propensity score matching procedure. We also find that
the effect of partner individualism is less salient when the audit firm is under more stringent regulatory monitoring and when clients are more important, but
more salient when individualistic partners are more confident about being different. Further analyses suggest that our main inferences are robust to controlling
for differences in partners’ cultural backgrounds and using client-pairs audited by the same audit partner. Collectively, our study provides novel evidence on
the role of auditor individualism in earnings comparability.
TLDR: They crunched the data and determined audit partners who didn’t go to school with a dozen people who also have their name tend to be more
“individualistic.”
Phys.org discusses the paper titled “Does audit partner individualism reduce client earnings comparability?” authored by Young Hoon Kim, assistant professor
of accounting at the Donald G. Costello College of Business at George Mason University and co-authored by Yinghua Li of Arizona State University and Dechun Wang
of Texas A&M University:
The researchers analyzed filings from 2,829 publicly traded companies over the period 2016–2020. They classified the first names of the associated audit
partners as either common or uncommon, depending on whether the names were among the 50 most frequent first names by gender as per the Social Security
Administration database.
Comparing filings from otherwise similar companies, the researchers concluded that financial reports audited by uncommonly named auditors exhibited up to 8.3%
more deviation than those done by their commonly named counterparts.
Phys.org continues:
Why is this issue worth looking into? Kim highlights that earnings comparability—that is to say, consistent application of reporting standards across
filings—is generally seen as a good thing for market efficiency. That rule of thumb could lead one to conclude that individualistic auditors, including those
with non-standard first names, are a liability for the Big 4. But the reality is much more complicated, Kim says.
“In many cases, better comparability is a good thing. But truthful representation is more important. And we do not find that individualistic auditors produce
low-quality outcomes.”
He also references another study that found auditors with a history of speeding tickets “were more aggressive in auditing and therefore quality
deteriorated.” I think he means this one that found clients of partners with prior legal infractions exhibit a higher likelihood of material misstatements
revealed through subsequent restatements, greater propensity to misstate based on the F-score, more instances of “missed” material weaknesses, and less
timely loss recognition, while also paying lower audit fees.
To better understand the names the researchers consider common I headed to the Social Security database and arbitrarily picked 1975 to get a list of the top 20
most popular baby names that year as 50 seems like a good age to check. Feel free to check yourself using any year you like.
Rank Male name Female name
1 Michael Jennifer
2 Jason Amy
3 Christopher Heather
4 James Melissa
5 David Angela
6 Robert Michelle
7 John Kimberly
8 Brian Lisa
9 Matthew Stephanie
10 William Nicole
11 Daniel Rebecca
12 Joseph Christina
13 Eric Jessica
14 Jeffrey Amanda
15 Kevin Elizabeth
16 Richard Kelly
17 Scott Sarah
18 Steven Julie
19 Mark Mary
20 Thomas Laura
21 Anthony Shannon
22 Timothy Christine
23 Ryan Dawn
24 Jeremy Tracy
25 Charles April
26 Joshua Rachel
27 Chad Karen
28 Andrew Andrea
29 Paul Carrie
30 Jonathan Maria
31 Shawn Tammy
32 Aaron Susan
33 Gregory Wendy
34 Stephen Stacy
35 Kenneth Tina
36 Benjamin Patricia
37 Justin Tiffany
38 Adam Erin
39 Patrick Lori
40 Sean Cynthia
41 Edward Tara
42 Donald Danielle
43 Todd Crystal
44 Brandon Stacey
45 Nathan Tonya
46 Ronald Jill
47 Bryan Misty
48 Jose Emily
49 Keith Monica
50 Gary Tanya
Note: Rank 1 is the most popular, rank 2 is the next most popular, and so forth.
By comparison, my name ranked 170 the year I was born. It peaked in popularity in 1983 with 2,078 total births, 0.116 percent of all female births in the United
States that year. So that totally explains why I can count the number of Adriennes I’ve met over my lifetime on one hand.
What does this mean for capital markets when all the Jaxxons and Ayshleighs born last decade are old enough to be engagement partners?
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