This study investigates the formation of audit partner-manager pairings (called dyads) on audit engagements, and the consequences of this dyad formation on the functioning of the engagement team. Prior studies mainly focus on the role of a single team leader, while in practice, an audit team is usually led by two senior individuals, the manager and the engagement partner. This dual-leadership structure and its potential effect on the team are largely unexplored topics. We draw on the theory of homophily to develop and test predictions using data from 221 Dutch engagement teams. The analyses suggest that partners and managers that form a dyad are more similar in terms of their skills and leadership behaviors than would be the case for randomly matched partners and managers. However, dyad similarity is not always beneficial for the functioning of the engagement team. In fact, dyad similarity generally has a negative effect on team climate and team performance. The exception is when the partner and manager are both highly skilled and demonstrate strong leadership behaviors. Otherwise, a complementary matching of skills and leadership behaviors of the partner and manager is superior and leads to better team climate and team performance. Team performance is self-assessed: how well the audit engagement team performed. Team climate is measured as the team’s assessment of psychological safety, team commitment, and team identity. Our findings on partner-manager dyads can inform audit firms on how to better assign and manage their audit teams, particularly since the audit partner chooses the manager most of the time (68 percent of the engagements in our study)

Team science research in the organizational behavior (OB) literature shows that successful teams must elicit “voice” from its members, i.e., the willingness to speak up and share information with the team. We propose a framework that recognizes when leaders exhibit their own “voice” behaviors, it creates psychological safety for the team – i.e., it allows team members to feel safe and encouraged to speak up about important audit matters. Analysis of data from 127 audit engagement teams with 754 auditors indicates the following. First, there is a positive and dominant effect on an audit team’s psychological safety (and ultimately on team voice climate and team performance) when managers engage in voice role modeling behavior. However, when the manager is also seen to engage in negative counterproductive behaviors, such as taking “short cuts” during the audit, the positive effects of his / her voice modeling behaviors are lost. This finding shows the importance of avoiding “mixed messages” from the manager, as this leads audit team members to question whether it is safe to speak up. Second, our findings reveal that when the partner and manger differ in emphasizing voice behaviors (one high, one low), these mixed (inconsistent) messages did not diminish perceived team psychological safety. Thus, if at least one leader (either the partner or the manager) is enacting high levels of voice role modeling behavior, the team still has high psychological safety and team voice climate. The results emphasize the need for leadership training to help partners and managers demonstrate, through their own “voice” leadership behaviors, that there is an environment of psychological safety that enables voice for the audit team. However inconsistent signals from team leaders can potentially compromise the team’s sense of psychological safety.