Research Symposium

BIO

Janie Nguyen is a sophomore at Florida State University pursuing a Bachelor of Science in Accounting and Management Information Systems, maintaining a perfect 4.0 GPA and earning a place on the President's List since her first semester.
Her work sits at the intersection of business and data analytics. As a Research Team Lead at FSU's Center for Undergraduate Research and Academic Engagement, she leads a 7-member team studying hometown bias in audit partner decision-making, building automated data pipelines and translating complex datasets into insights for senior stakeholders. Her technical toolkit spans Python, SQL, Excel, and Power BI, applied across audit internship work and academic research.
Passionate about turning raw data into meaningful business decisions, Janie is actively exploring how her dual expertise in accounting and information systems can shape her career – whether in analytics, advisory, or a field yet to be discovered. Outside the classroom, she tutors over 50 students weekly in accounting and quantitative reasoning, reflecting her commitment to her academic community.

Hometown Bias in Auditing

Abstract

This study investigates whether audit partners exhibit hometown bias, which may affect audit quality and financial reporting integrity. Understanding this bias is important for consistent, objective auditing and broader accounting practices. Data were collected on audit partners across the U.S., including Big 4 and Non-Big 4 firms, spanning all 50 states. Information from public people-finder sources was compiled into spreadsheets capturing demographics, education, and professional affiliations. Analyses examined the relationship between auditors’ hometowns and client outcomes: earnings management, restatements, going concern opinions, and internal control weaknesses. Firms audited by hometown partners are more likely to just meet or slightly beat earnings forecasts, with positive coefficients of 0.295–0.383, suggesting leniency. Negative coefficients for restatements indicate these firms are less likely to later correct financial statements. Going concern opinions show minimal effect, likely due to high oversight. Internal control weakness results are mixed, stronger in Non-Big 4 firms, highlighting the influence of oversight. Geographically, California (148) and New York (119) account for ~23% of the 1,160-firm sample, suggesting hometown effects are concentrated in major financial hubs. The findings demonstrate that hometown bias exists among audit partners, influencing earnings judgments and restatement likelihood, while high-oversight judgments remain largely unaffected. This bias underscores the need for careful audit partner assignments and continued research into mechanisms to maintain objectivity, particularly in concentrated regions.

Keywords: Hometown Bias, Audit Quality, Earnings Management, Accounting, Business