Tacit knowledge sharing in small audit firms and audit quality inputs: the antecedent effect of auditors’ social capital

Drawing on the International Auditing and Assurance Standards Board (IAASB) audit quality framework and related knowledge management literature, this study aims to examine the influence of tacit knowledge sharing on audit quality inputs within small audit firms’ realm. It also investigated auditors’ social capital antecedent effect via tacit knowledge sharing on audit quality inputs.

An integrated model was developed to depict the study constructs’ relationships. The model was then tested using the partial least squares structural equation modelling based on data collected from auditors belonging to small audit firms in Jordan.

The results indicate that tacit knowledge sharing influences positively the auditors’ values, ethics, attitudes, experiences, skills and knowledge (i.e. audit quality inputs). This finding implies that active tacit knowledge sharing within a small audit firm is a strong driver for audit quality through improving its inputs. The results also demonstrate that structural, relational and cognitive social capital indirectly affect audit quality inputs through tacit knowledge sharing. Accordingly, social capital can be viewed as an audit firm resource that can smooth auditors’ tacit knowledge-sharing progress.

The IAASB encourages audit firms to explore ways to boost audit quality. This study offers empirical evidence on the influence of tacit knowledge sharing on audit quality inputs as a way to boost audit quality. It also offers insights into the value of social capital dimensions and indicates the driving forces to make auditors willing to engage in tacit knowledge sharing and, as a result, improve audit quality inputs.