Evidence of organizational learning and organizational forgetting from financial statement audits

Research output: Contribution to journalArticlepeer-review

15 Scopus citations


This paper examines the association between audit firm tenure and audit production efficiency. The analyses are based on proprietary audit production data provided by a large international accounting firm. The results document evidence of learning over time. Specifically, repeatedly servicing a client increases production efficiency by reducing the total audit hours expended in an audit engagement. Learning rates vary across different ranks of labor and learning is more pronounced among higher personnel ranks, with lower ranks experiencing little learning. Further, learning rates are not constant over time; there is little incremental learning beyond the initial productivity gains consistent with the concept of the learning curve. Finally, the results show some evidence of productivity losses as audit hours increase for very long tenures consistent with the notion of organizational forgetting.

Original languageEnglish
Pages (from-to)53-72
Number of pages20
Issue number2
StatePublished - May 2016

Bibliographical note

Publisher Copyright:
© 2016 American Accounting Association. All rights reserved.


  • Audit efficiency
  • Audit production
  • Organizational learning

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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