Table 4. Auditor narcissism and audit...

Table 4.

Auditor narcissism and audit reports readability (FOG index)

Variables	H1		H2
	Partners narcissism		Lead partner		Review partner
	Coef.	t-statistic	Coef.	t-statistic	Coef.	t-statistic
AUD_NAR	0.185***	2.670	0.160**	2.300	0.140**	2.000
AUD_SPEC	−0.010	−0.090	0.016	0.120	0.061	0.470
AUD_TENURE	0.031***	2.730	0.024*	1.820	0.029**	2.100
AUD_MERGE	0.346**	1.760	0.295	1.490	0.304	1.520
DISTANCE	−0.107	−1.460	−0.129*	−1.750	−0.140*	−1.890
AUD_CHANGE	−0.004	−0.060	−0.038	−0.540	−0.029	−0.400
AUD_OPINION	−0.154**	−1.970	−0.090	−1.200	−0.176**	−2.240
LEAD_GENDER	−0.135	−1.130	−0.172	−1.370	−0.178	−1.400
REVIEW_GENDER	0.030	0.230	−0.046	−0.340	−0.031	−0.220
LEAD_CPA	−0.002	−0.220	−0.013**	−2.020	−0.010	−1.280
REVIEW_CPA	0.017**	2.520	0.007	1.010	0.010	1.340
AQ	−0.862	−1.270	−1.043	−1.560	−0.973	−1.430
SIZE	0.014	0.310	0.021	0.460	−0.014	−0.310
SALESGROWTH	−0.279**	−2.070	−0.284**	−2.150	−0.287**	−2.120
CFO	−0.074	−0.160	−0.033	−0.070	0.098	0.220
LOSS	0.022	0.180	0.020	0.160	0.029	0.230
BANKRUPTCY	0.045	0.760	0.007	0.120	−0.001	−0.010
MB	0.085	1.580	0.079	1.490	0.083	1.530
AGE	0.061	0.590	0.053	0.520	0.036	0.390
OPERCYCLE	−0.057	−0.530	−0.007	−0.070	0.019	0.180
RESTATE	−0.027	−0.400	−0.025	−0.370	−0.038	−0.560
QUICK	−0.197*	−1.660	−0.212*	−1.810	−0.105	−0.890
TOPSH	1.006***	5.250	0.860***	4.500	1.092***	5.710
Intercept	19.139***	15.310	19.422***	15.670	19.347***	15.860
FIRM FE	Yes		Yes		Yes
YEAR FE	Yes		Yes		Yes
AUDITOR FE	Yes		Yes		Yes
Observations	2,691		2,691		2,691
Adj. R²	0.269		0.253		0.248

Variables	H1		H2
	Partners narcissism		Lead partner		Review partner
	Coef.	t-statistic	Coef.	t-statistic	Coef.	t-statistic
AUD_NAR	0.185***	2.670	0.160**	2.300	0.140**	2.000
AUD_SPEC	−0.010	−0.090	0.016	0.120	0.061	0.470
AUD_TENURE	0.031***	2.730	0.024*	1.820	0.029**	2.100
AUD_MERGE	0.346**	1.760	0.295	1.490	0.304	1.520
DISTANCE	−0.107	−1.460	−0.129*	−1.750	−0.140*	−1.890
AUD_CHANGE	−0.004	−0.060	−0.038	−0.540	−0.029	−0.400
AUD_OPINION	−0.154**	−1.970	−0.090	−1.200	−0.176**	−2.240
LEAD_GENDER	−0.135	−1.130	−0.172	−1.370	−0.178	−1.400
REVIEW_GENDER	0.030	0.230	−0.046	−0.340	−0.031	−0.220
LEAD_CPA	−0.002	−0.220	−0.013**	−2.020	−0.010	−1.280
REVIEW_CPA	0.017**	2.520	0.007	1.010	0.010	1.340
AQ	−0.862	−1.270	−1.043	−1.560	−0.973	−1.430
SIZE	0.014	0.310	0.021	0.460	−0.014	−0.310
SALESGROWTH	−0.279**	−2.070	−0.284**	−2.150	−0.287**	−2.120
CFO	−0.074	−0.160	−0.033	−0.070	0.098	0.220
LOSS	0.022	0.180	0.020	0.160	0.029	0.230
BANKRUPTCY	0.045	0.760	0.007	0.120	−0.001	−0.010
MB	0.085	1.580	0.079	1.490	0.083	1.530
AGE	0.061	0.590	0.053	0.520	0.036	0.390
OPERCYCLE	−0.057	−0.530	−0.007	−0.070	0.019	0.180
RESTATE	−0.027	−0.400	−0.025	−0.370	−0.038	−0.560
QUICK	−0.197*	−1.660	−0.212*	−1.810	−0.105	−0.890
TOPSH	1.006***	5.250	0.860***	4.500	1.092***	5.710
Intercept	19.139***	15.310	19.422***	15.670	19.347***	15.860
FIRM FE	Yes		Yes		Yes
YEAR FE	Yes		Yes		Yes
AUDITOR FE	Yes		Yes		Yes
Observations	2,691		2,691		2,691
Adj. R²	0.269		0.253		0.248

Notes:

This table displays the OLS regression results analyzing the relationship between auditor narcissism (AUD_NAR) and audit report readability (FOG index). The results are also presented for both the lead and review partners. *, ** and *** indicate statistical significance at the 10, 5 and 1% levels, respectively. Variable definitions are available in Appendix

Source: Authors’ own work

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