Quality review, continuing professional education, experience and substandard performance: An empirical study

This paper offers empirical evidence of an association between results of quality review (QR), levels of continuing professional education (CPE), experience, and quality of performance in public accounting practices. These results are based on enforcement files of the Texas State Board of Public Accountancy for all certified public accountants found in violation of competency standards from 1991 to 1995. QR results, levels of CPE, and experience of violators with similar data for a random control sample of Texas CPAs are compared. Results indicate that the number of relevant CPE hours for violators is significantly less than those for the control sample. Additionally, for violators of governmental accounting and auditing standards, who comprise the majority, the amount of relevant experience for violators is significantly less than that of the control sample. Finally, the incidence of QR and the frequency of unqualified reports for violators is significantly lower for violating individuals and firms than in the control sample.