Workshop Series: Accounting Area Speaker Prof. Rebecca Hann
Navigating Auditor Turnover: Early Promotion and Retention in the Audit Profession
Presented by Rebecca Hann
Associate Dean of Research and Doctoral Programs
Dean鈥檚 Professor of Accounting
Robert H. Smith School of Business, University of Maryland
Date: Friday, October 31, 2025
Time: 10:30 AM 鈥� 12:00 pm
Location: Bronfman Building, Room 045
All are cordially invited to attend.
Abstract:
This study examines whether early promotion is related to enhanced retention or accelerated exits in the audit labor market, especially during periods of heightened turnover. Using detailed employment data, we track cohorts of junior auditors who began their careers at the top 25 public accounting firms from 2016 to 2020. We document that roughly 50% of each cohort had left their firm by the end of their third year, highlighting the substantial turnover challenge facing audit firms. Cox hazard models reveal that female auditors, those with accounting degrees from target universities, and those starting at Big 4 firms experience lower exit risk. With respect to promotion timing, early promotions are linked to lower overall exit rates, while regular promotions show dynamic retention patterns鈥攁n initial reduction in exit risk that diminishes over time and reverses by the third quarter after promotion. Cause-specific hazard analyses show that early promotion is persistently associated with lower exit risk to other public accounting firms, whereas regular promotion shows no reduction in such exits and corresponds with earlier transitions into corporate accounting roles. We further find that during the Great Resignation (GR)鈥攁 period of elevated voluntary turnover鈥攁udit firms substantially accelerated promotions. Overall, drawing on large-sample evidence, we document distinct exit dynamics for early versus regular promotions and highlight how firms adjust this practice in response to turnover pressures, despite the risk of employee poaching.
