This study draws on both audit quality and trust theories to examine the effects of financial restatements on the auditor-client trust relationship, as evidenced by changes in audit fees of the auditor's other non-restating office-level clients in the year following the restatement announcement....

This study examines the effect of a restatement on auditor's reputation as evidenced by any changes in the market value of the auditor's clients and the audit fees in the subsequent year. We find that firms sharing the same auditor as the restatement firms report a negative abnormal return...