This study examines whether differences in proxies for audit-quality between Big 4 and non-Big 4 audit firms could be a reflection of their respective clients' characteristics. In our analyses, we use three audit-quality proxies: discretionary accruals, the ex ante cost of equity capital, and...

This study uses a very simple but intuitive model to examine how audit quality is determined. It concludes that audit quality is higher if two forces have opposite effects on an auditor's conservatism are balanced and significant. A force that makes an auditor less conservative is the benefit...

This study investigates whether and how judge ideology affects auditors' litigation risk. Using the appointing president's political affiliation to measure federal judge ideology, we document that audit fees charged to auditees locating in jurisdictions of circuit courts with more Democratic...

Auditors' propensity to issue Going Concern Audit Reports (GCARs) is one of the proxies often used for audit quality. Although this propensity is a distinguishing characteristic of auditors, it does not indicate quality according to both theory and practice. In theory, higher-quality auditors...

This paper uses a model extended from DeAngelo (1981) to examine audit market and audit pricing. When auditors have differential operational efficiencies, the audit market becomes delicate. On one hand, auditees would like to reduce audit fees by to purchasing audit services from the most...