Using a large sample of privately held Korean companies that are not required to obtain an external audit, this paper examines the value of voluntary external audits of financial statements with respect to the cost of debt. We find that private companies with an external audit pay a...

Conventional wisdom holds that joint audits would improve audit quality by enhancing audit evidence precision, because “Two heads are better than one,” and by enhancing auditor independence, because it is more expensive for a company to “bribe” two audit firms than one. Our paper...

We revisit the notion of audit quality and investigate how audit quality is related to auditor size and the structure of the auditing industry. We discuss a model of audit firm competition where both audit quality and audit firm size are endogenous. Based on this model, we predict how certain...

The extant auditing literature documents an inconsistent relationship between audit fees and market concentration. In this paper, we argue that the impact of market concentration on audit fees is auditor and auditee specific. Based on the fact that the audit services to an auditee are generally...

We study the effects of cross-listings on audit fees. We first develop a model in which legal environments play a crucial role in determining the auditor's legal liability. Our model and analysis predict that auditors charge higher fees for firms that are cross-listed in countries with stronger...