Continuing Professional Education for Audit Partners and Audit Quality

This study examines the effect of continuing professional education (CPE) for audit partners on audit quality. In Korea, as in many other countries, certified public accountants are required to attend at least 40 hours of CPE annually to perform external audits. However, the effect of CPE on audit quality is not clear and we are not aware of any prior studies that directly investigate such an effect. Using a unique dataset on the annual CPE hours of audit partners from 2006 to 2015, we fail to find evidence that greater CPE is significantly related to improved audit quality. Through several cross-sectional analyses, we fail to identify any specific circumstances in which greater CPE improves audit quality. Despite important empirical limitations, this study provides practical implications on the role of CPE in determining audit quality. The findings suggest that regulators, professional bodies, and academics need to pay attention to the issue and develop ways to improve the effectiveness of the CPE.