We evaluate whether, and under what circumstances, corporate tax aggressiveness influences audit pricing. Using a compound measure of two long-run effective tax rates, we find that tax aggressive firms pay higher fees for external audit services after controlling for factors related to earnings...

Responsive regulation (RR) theory posits that effective regulators enforce compliance by escalating penalties only if persuasion fails, otherwise risking formation of a culture of resentment. Using RR theory as a lens, we examine the interactions between large audit firms and the PCAOB during...

We examine the effect of general, task and industry experience on auditor performance related to the identification of client's business risks (CBR) and identification of entity level controls (ELC) in a construction company. We find the following: (1) increased general experience is only...

In this paper we argue that audit firms rationally consider the potential reactions of their rivals when deciding how fiercely to compete in a given market. Based on prior literature in the field of industrial organization (Bernheim and Whinston [1990]), we hypothesize that competing with the...

Competition in audit markets is an important topic but direct tests of market competition have been limited. In this paper, we examine how audit firms behave when they are confronted with competition from another firm in a wide range of industry segments in a local market. Sharing a large number...

The purpose of this paper is to integrate research on audit markets, fees and production. We present a model of the components that determine audit fees and production [hours]. We observe that, overall, knowledge is concentrated on certain aspects of the model and it is not well-integrated. In...

We examine the impact of informal cultural attributes, such as generalized trust and civic cooperation in a society, on the presence of Big N auditors and audit fees in country-specific audit markets. On one hand, because societies with higher trust and civic cooperation are associated with low...

We use data from internal assessments of audit quality in a Big 4 firm to investigate the impact of audit firm tenure and auditor-provided non-audit services (NAS) on audit quality. We find that first-year audits receive lower assessments of audit quality and that quality improves shortly...

Effective consultation is critical for improving the audit of estimates. In an experiment where audit managers acted as consultants to other auditors, we examine conditions in which consultants either recommend estimates that differ substantially from advice-seekers' assessments (contrariness)...

Several initiatives and auditors’ professional organizations have argued that assurance about the quality of information, processes, or compliance encompasses the future market base for the accounting profession. However, the market for assurance services is in its formative stage and not well...