This study examines the effects of a joint audit on auditor’s report consensus and accuracy. We investigate whether a joint audit, particularly the report issued, improves an audit’s quality. We measure the audit’s quality using the degree of auditor consensus in the auditor’s report. We...

This paper develops a theory of the negotiating positions, or preferences over auditing standards, of the interest groups that may set such standards. Specifically, we consider how the preferences of auditors as standard setters may differ from the preferences of investors. We represent auditing...

Although skepticism is widely viewed as essential to audit quality, there is a debate about what form is optimal. The two prevailing perspectives that have surfaced are ‘neutrality’ and ‘presumptive doubt’. With neutrality, auditors neither believe nor disbelieve client management. With...

Audit subordinates typically work with multiple supervisors who are likely to vary in their level of coaching quality (CQ). While prior research suggests a low CQ supervisor could negatively affect a subordinate's work attitudes, theory indicates that the presence of other positive coaching...

The recent financial crisis has led to a major debate about fair-value accounting. Many critics have argued that fair-value accounting, often also called mark-to-market accounting, has significantly contributed to the financial crisis or, at least, exacerbated its severity. In this paper, we...

The recent financial crisis has led to a vigorous debate about the pros and cons of fair-value accounting (FVA). This debate presents a major challenge for FVA going forward and standard setters' push to extend FVA into other areas. In this article, we highlight four important issues as an...

We investigate the strategic decision making of audit firms in a tendering process. In particular, we are interested in how audit firms behave to acquire audit clients and which audit quality is ensured. Our main findings are manifold. First, if two big audit firms are competing, we do not...

Due to empirical research, tax and accounting compliance costs are a considerable burden for private businesses. However, cost estimates may be biased due to survey nonresponse and questionnaire framing effects. This paper investigates the impact of both aspects on the estimated cost burden. I...

We analyze the reporting strategies of firms and the investigation strategies of auditors in an archetype principles-based financial reporting system. To this end, we add a verification stage to a standard cheap-talk game, and apply the resulting game to financial reporting. We show that for a...

Tax uncertainty often negatively affects investment. Advance tax rulings (ATRs) are commonly used to provide tax certainty. We analyze ATRs from the taxpayers' and tax authorities' perspectives. Investors request ATRs if the fee does not exceed a certain threshold. We integrate this finding into...