Investors and managers are increasingly focused on business decision making and reporting related to environmental, social, and governance (ESG) issues. In this paper, we use interview data from 29 chief audit executives (CAEs) from publicly traded companies in the U.S. to propose a framework...

A firm's decision on whether to choose the same auditor as a close competitor reflects a trade-off between exercising caution to protect its proprietary information and pursuing the benefits of auditor knowledge derived from providing services to comparable clients. We conduct a survey of audit...

We examine whether audit fees reflect characteristics of individual executives incremental to known determinants of fees. Using a novel executive effects approach, we find that unexplained audit fees exhibit a statistically and economically significant association with executive effects after...

We examine whether auditors effectively incorporate cues indicating increased risk into their evaluation of fair value estimates. Consistent with concerns from PCAOB inspections, more than one-third of fair value estimates in our security-level dataset differ from the true fair value by an...

This study examines whether auditor competencies developed through industry specialization play a role in monitoring client firms' accounting estimates. Specifically, I focus on asset impairment decisions as a key accounting estimate given managers incentives to hide these losses and the PCAOB's...

Small accounting firms represent important participants in the audit market, yet details of how they operate and develop competencies remain unexplored. Small firms often join forces through accounting associations and networks (“AANs”), which may help them overcome significant challenges...

Relying on their history of legal infractions to measure individuals' risk tolerance, we examine the association between engagement partners' risk appetites and audit quality in the U.S. Criminology and economics research links criminal activity with enduring personality traits that capture an...

We investigate changes in the quality and cost of audit services surrounding PCAOB Rule 3211, which requires disclosure of audit partner names in Form AP. To isolate changes due to Rule 3211 from other confounding factors, we use difference-in-differences analyses with separate control groups,...

Corporate governance research focuses primarily on the inputs into effective governance, yet we know little about how companies monitor and evaluate their governance systems on an ongoing basis. This is important because investors are increasingly relying on information about corporate...

This paper examines the power dynamic between chief financial officers (CFOs) and audit partners during negotiations involving a complex accounting estimate. Specifically, we identify engagements with large disparities in age between the CFO and audit partner to capture the relative power of the...