This study investigates the influence of management over auditor selection decisions during a period in which audit committees have “direct responsibility” for auditor selection. We find that contrary to the intent of SOX, management continues to have significant influence over auditor...

Many legal jurisdictions, including the U.S. and U.K., have passed regulations to address the potential negative impacts of a lack of competition and high concentration in public company audit markets. One consequence of increased regulations, desired or not, is that they have presumably...

We examine the relation between low quality internal controls and audit fee premiums. Using a novel dataset of audit hours and audit fees we find, consistent with the audit risk model, that auditors increase their effort (hours) due to low internal control quality. We find that auditors also...

This study investigates the relation between audit regulation and cost of equity capital. There is scant empirical evidence on this relation because changes in audit regulation are frequently accompanied by other major regulatory changes. We exploit variation in the timing of regulatory changes...

This study investigates the relation between audit regulation and the cost of equity capital. While a relation is intuitively appealing, there is a general lack of empirical evidence because changes in audit regulation are frequently accompanied by other major regulatory changes. We exploit...