Firms with internal control weakness (ICW) problems are less likely to provide managers with timely and precise information required for adjusting internal resources. The real options theory implies that managers in ICW firms, faced with information uncertainty, are more likely to postpone...

This study investigates the monitoring role of high-quality auditors defined as office-level industry specialists in the stock market valuation of cash assets. We find that the market value of cash holdings is significantly higher for the client of an industry specialist auditor. The marginal...

We investigate whether and how the market for corporate control affects the demand for audit service in a cross-country setting. In so doing, we exploit the staggered enactments of merger and acquisition (M&A) laws as an exogenous shock that substantially increases takeover pressure. We find...