This paper provides the first evidence that state-level liability standards affect auditor behavior. We hypothesize that auditors demand more conservative reporting when their insurance clients are domiciled in states with more stringent standards for third party claims against the auditor for...

We argue that the association between auditor industry specialization and audit quality depends on how long the auditor has been a specialist. We measure audit quality using absolute discretionary accruals, income-increasing discretionary accruals, and book-tax differences. Our results, based on...

Using several audit quality measures, Minutti-Meza (2013, MM) argues that controlling for client characteristics through matching eliminates the association between auditor industry specialization and audit quality. Gaver and Utke (2019, GU) argue that this result is unstable across matching...