The Role of Tacit Knowledge in Auditor Expertise and Human Capital Development

Jasmijn C. Bol, Cassandra Estep, Frank Moers, Mark E. Peecher

Research output: Contribution to journalArticlepeer-review


Two critical aspects of the model of auditor expertise development in Tan and Libby [1997] are that audit firms do not value tacit knowledge in inexperienced auditors but do value it in experienced auditors. We update the former and extend the latter. Our paper predicts and finds that audit firms now do value tacit knowledge in inexperienced auditors, especially when their supervisors have higher tacit knowledge. Our proxies of value include higher promotability assessments, annual evaluations, and cash bonuses. Our paper also extends Tan and Libby [1997] by positing that enhanced development of expertise and audit firm human capital are two reasons audit firms value tacit knowledge in experienced auditors. As predicted, higher tacit knowledge in experienced auditors is positively associated with higher tacit knowledge acquisition by their inexperienced subordinates and with stronger firm commitment of inexperienced subordinates having higher tacit knowledge.

Original languageEnglish (US)
Pages (from-to)1205-1252
Number of pages48
JournalJournal of Accounting Research
Issue number4
StatePublished - Sep 2018


  • M40
  • M41
  • M42
  • M51
  • M52
  • audit expertise
  • firm commitment
  • performance evaluation
  • tacit knowledge

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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