We investigate how overlapping activities of bank regulators and supervisors and bank auditors influence banks' internal control quality, auditor-client contracting (audit fees and audit effort), and financial statement reliability. Using material weaknesses in internal controls as a proxy for...

We investigate the extent to which auditors of U.S. companies reduce fees on initial audit engagements (termed 'fee discounting'). We hypothesize that rivalry among sellers, in terms of client turnover and price competition, is more intense among smaller audit firms. The data support this...

We analyze how investors and information intermediaries perceive auditor tenure. Using earnings response coefficients from returns-earnings regressions as a proxy for investor perceptions of earnings quality, we document a positive association between investor perceptions of earnings quality and...

We investigate the extent to which auditors of U.S. companies reduce fees on initial audit engagements (termed 'fee discounting'). We hypothesize that rivalry among sellers, in terms of client turnover and price competition, is more intense among smaller audit firms. The data support this...

We analyze how investors and information intermediaries perceive auditor tenure. Using earnings response coefficients from returns-earnings regressions as a proxy for investor perceptions of earnings quality, we document a positive association between investor perceptions of earnings quality and...

I hypothesize that corporate control considerations determine the choice of financing over a middle range of ownership that excludes very high and very low levels ownership. Target managers who value control and wish to maintain control prefer stocks which increase their chances of retaining...

Although auditor litigation risk is considered as a leading explanation for auditor resignations, audit risk, and business risk might also trigger resignations. Auditor litigation risk is defined as the risk of the auditor being involved in a lawsuit, audit risk is defined as the risk that the...

We analyze audit fees and audit risk to extract auditor's assessment of family firms' financial reporting quality. Relative to non-family firms, we find that auditors charge significantly less from family firms and the fee difference shrinks in magnitude when family firms have high audit risk....

Prior studies provide conflicting evidence on the reporting/disclosure quality of family firms. We provide unique insights by analyzing the pricing of audit engagements. Because financial reporting quality affects audit risk, which determines how auditors price engagements, we analyze audit fees...

We investigate whether companies strategically change accounting estimates to manipulate earnings, as some claim (“opportunism” hypothesis), or whether these modifications represent changes in the underlying fundamentals of financially troubled or risky companies updating their priors about...