On the morning of June 3rd, at the invitation of the School of Management, Professor Chen Yangyang, the head of the Accounting Department and doctoral supervisor at the College of Business, City University of Hong Kong, gave an academic lecture titled "The Importance of Auditors’ Unmet Promotion Expectations to Audit Quality" in Room 210 of the college. This lecture was the 12th installment of the School of Management's 2024 Overseas Lecture Series, chaired by Accounting Department faculty member Feng Hua, with some teachers and students from the Accounting Department of the college in attendance.

Professor Chen Yangyang utilized proprietary data on the promotion of individual auditors in China, employed machine learning methods to construct auditors' unmet promotion expectations, and measured audit quality through audit adjustments. She explored how the psychological gap caused by unfulfilled promotion expectations of auditors affects audit output. Based on a comprehensive review of theoretical research and practical surveys, Chen Yangyang proposed a competitive analytical framework. Through the establishment of rigorous empirical testing models, she found that there is a negative correlation between unmet promotion expectations of auditors and the magnitude of audit adjustments, which implies a reduction in audit quality. Further research revealed that this negative correlation is amplified under circumstances such as lower salary levels for auditors, perceived unfair treatment, fewer social network resources, and higher levels of client importance. This study holds significant theoretical and practical value for enhancing the construction of human capital in firms and optimizing the promotion channels for auditors.

During the lecture, participating teachers and students actively asked questions and engaged in discussions, creating a lively atmosphere that brought new insights into the field of audit research for the attendees.

Introduction to the Speaker:

Chen Yangyang, Professor and Head of the Department of Accounting at the College of Business, City University of Hong Kong. Professor Chen obtained her Ph.D. from the University of Melbourne and has previously held positions at the Hong Kong Polytechnic University and Monash University. Her research interests include corporate finance and financial accounting, such as executive compensation, corporate innovation, audit quality and pricing, earnings management, and corporate disclosure. Professor Chen's research findings have been published in top international journals including The Accounting Review, Journal of Accounting Research, Journal of Financial Economics, Management Science, Journal of Financial and Quantitative Analysis, Contemporary Accounting Research, and Review of Accounting Studies. Professor Chen currently serves as the Editor-in-Chief of the China Journal of Accounting Research and Co-Editor-in-Chief of the Journal of Contemporary Accounting and Economics.