I examine whether employee-initiated lawsuits against an audit office adversely affect its ability to attract high-quality talent and deliver quality audits. I posit that employee lawsuits erode prospective employees’ perceptions of an office, diminishing their willingness to join. Using a comprehensive data set of individual auditor profiles, I find a decline in the quality of newly hired auditors following an employee lawsuit. Cross-sectionally, the adverse effect of employee lawsuits on talent acquisition is more pronounced when an office is undergoing higher growth and when a case receives greater media attention. Conversely, this adverse effect is less pronounced when an audit office is larger or offers more competitive wages within the local area. When an audit office is unable to recruit high-quality talent, its audit quality is likely to suffer. Consistent with this, I find a deterioration in audit quality provided by an office following an employee lawsuit. Overall, this study underscores the importance of human capital management and employer reputation for audit offices that operate in competitive labor markets.

中文翻译：

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当员工上法庭时：员工诉讼和审计办公室的人才招聘


我研究了员工对审计办公室发起的诉讼是否对其吸引高素质人才和提供高质量审计的能力产生不利影响。我认为员工诉讼会削弱潜在员工对办公室的看法，降低他们加入的意愿。使用个人审计师资料的综合数据集，我发现在员工诉讼后新聘审计师的质量有所下降。从横截面来看，当办公室增长更快且案件受到媒体更多关注时，员工诉讼对人才招聘的不利影响更加明显。相反，当审计办公室规模较大或在当地提供更具竞争力的工资时，这种不利影响就不那么明显。当审计机构无法招聘到高素质人才时，其审计质量可能会受到影响。与此相一致的是，我发现在员工提起诉讼后，某个办公室提供的审计质量有所下降。总体而言，本研究强调了人力资本管理和雇主声誉对于在竞争激烈的劳动力市场中运作的审计办公室的重要性。