Reported deficiencies continue to persist in audits of fair value measurements and other complex accounting estimates (hereafter, “FVMs”), despite improvements in auditor performance observed by regulators. The persistence of reported deficiencies in audits of FVMs suggests that factors...

In response to numerous recent cases involving materially misstated financial information arising from fraudulent financial reporting, companies, auditors, and academics have increased their focus on strengthening internal controls as a means of deterring such unethical behaviors. However, prior...

Prior research has shown that when auditors are aware of overall risk information from procedures performed earlier in the audit, halo effects in subsequent judgments result (e.g., O'Donnell and Schultz 2005). The purpose of this study is to examine whether such effects occur in the context of...

Internal audit quality is an issue of great importance to both the internal and external audit professions. PCAOB Auditing Standard No 2 highlights this importance when addressing the reliance that the external auditor can place on the internal audit work product. The study discussed here...

In this study, we use a survey instrument to obtain perspectives from over 700 auditors about present-day audit workloads and the relationship between audit workloads, audit quality, and job satisfaction. Our findings indicate that auditors are working, on average, five hours per week above the...

This research experimentally investigates how auditors make combined auditee risk judgments during the planning of the audit of an account balance in a client's financial statements. If auditors fail to assimilate risk factors according to normative criteria, inefficient or ineffective audits...

We examine whether more experienced auditors develop helpful intuition when evaluating risk factors. We expect documentation requirements to inhibit the use of intuition by activating different knowledge structures, reducing judgment quality in areas where auditors have helpful intuition. In an...

Controversy over the desirability of corporate restructuring typically centers on the operational effectiveness of these events. The purpose of this study is to directly address this debate by providing evidence on the effect of restructurings on operating performance. This study incorporates a...

In early 2017, the PCAOB mandated the disclosure of audit participants, including the lead audit partner and other audit firms participating in the audit (“outside auditors”). In this study, we leverage this unique setting to examine whether investors find auditor identity useful. Using...

Firm management typically claims that voluntary accounting method changes (VACs) are made to enhance the informativeness of earnings by better matching accounting practices with economic reality. In contrast, skeptics argue that managers adopt new accounting procedures to opportunistically...