Audit Firm Tenure, Non-Audit Services, and Internal Assessments of Audit Quality

Timothy B. Bell, Monika Causholli, W. Robert Knechel

Research output: Contribution to journalArticlepeer-review

130 Scopus citations


We use data from internal assessments of audit quality in a Big 4 firm to investigate the impact of audit firm tenure and auditor-provided non-audit services (NAS) on audit quality. We find that first-year audits receive lower assessments of audit quality and that quality improves shortly thereafter and then declines as tenure becomes very long. Partitioning our sample between SEC registrants and private clients, we find that the decline in audit quality in the long tenure range is attributable to audits of private clients. For audits of SEC registrants, the probability of a high quality audit reaches its maximum with very long tenure. We also find that audit fees are discounted for first-year audits but auditor effort is higher than in subsequent years. We find no association, on average, between total NAS fees and audit quality in the full sample but observe that total NAS fees are positively associated with quality for SEC registrants and negatively associated with quality for privately held clients. Our findings are important for regulatory policies related to audit firm tenure and auditor-provided NAS.

Original languageEnglish
Pages (from-to)461-509
Number of pages49
JournalJournal of Accounting Research
Issue number3
StatePublished - Jun 1 2015

Bibliographical note

Publisher Copyright:
© University of Chicago on behalf of the Accounting Research Center, 2015.


  • Audit firm tenure
  • Audit quality
  • Non-audit services

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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