The main objectives of recent audit market regulations are to (1) increase audit quality, (2) decrease audit market concentration, and (3) foster competition between audit firms. However, the empirical evidence on whether such regulations fulfill these goals is limited. We construct a unique...

This paper investigates whether investors perceive high levels of auditor conservatism as excessive. Auditors can reduce their litigation risk by issuing going concern opinions to firms with relatively low default risk. However, this strategy is costly for investors. Investors cannot observe the...

While the accounting literature implies that increased discretionary accruals follow auditor changes, the underlying causal mechanism of this increase remains unclear. The potential reasons are the loss of the auditor's firm-specific knowledge or the firm's opportunistic choice of a new auditor....

Regulators frequently interpret a high audit market concentration as a threat to audit quality and want to foster competition. However, both the direction and the sign of the link between quality and concentration are unclear. This paper investigates the link between audit offices' market shares...