Title: Auditor industry expertise in Italy: evidence from the Big 4 partners

Authors: Tatiana Mazza; Stefano Azzali

Addresses: Department of Economics and Management, Università di Parma, Via Kennedy 6, 43125 Parma PR, Italy ' Department of Economics and Management, Università di Parma, Via Kennedy 6, 43125 Parma PR, Italy

Abstract: Auditor industry expertise is investigated from three lines of research areas: 1) transfer of auditor expertise; 2) effects of mandatory audit firm rotations; 3) effects of the adoption of International Financial Reporting Standards and of strengthening of Internal Controls over Financial Reporting. Interviewing the Big 4 partners in Italy, we learn that the area-level of industry expertise, in contrast to common law countries, complements the national-level, allowing for the transfer of tacit and codified knowledge among offices where the mandatory audit firm rotation cycle reduces the useful life and quality of office-level industry expertise. We learn that recent regulatory actions have increased the demand for task expertise but not industry expertise. The results could have implications: for regulators of European Union countries in the implementation of the mandatory audit firm rotation rule; for managers of audit firms in the decision of localisation of offices and in their employees' organisation to improve audit quality.

Keywords: auditor industry expertise; Big 4; interviews; mandatory audit firm rotation; Italy.

DOI: 10.1504/IJMFA.2026.152746

International Journal of Managerial and Financial Accounting, 2026 Vol.18 No.2, pp.185 - 203

Received: 01 Jun 2023
Accepted: 27 Jun 2024
Published online: 09 Apr 2026 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article