In the past six years, the average number of industries (2-digit SIC) serviced by audit offices in the United States has grown by 20% and the number of industries where the office has specialization has fallen by 40% (Data Source: Audit Analytics). This suggests a trend away from specialization...

In an effort to make audit reports more informative to investors, the U.K. recently passed a new audit reporting standard that requires auditors to disclose the risks of material misstatement (RMMs) that had the greatest effect on the financial statement audit. Using short-window market...

In this study I examine the relationship between the auditor's going concern opinion and management's forward-looking disclosures in the Management's Discussion and Analysis (MD&A) section of 10-K filings. The analysis is two-fold and addresses whether the presence of a going concern opinion is...

Recent proposals on audit regulation, whether in the EU or by the PCAOB, have been motivated by efforts to increase audit quality. However, there does not exist any generally agreed upon definition of audit quality. This paper aims to critically assess the status quo of the discussion regarding...

This paper examines the materiality guidance for eight of the largest U.S. and international public accounting firms. Knowledge of how materiality guidance is integrated into a firm's methodology is important for accounting and auditing researchers as well as for practitioners, regulators, and...

The aim of this paper is to examine the auditing practices of British gas companies at the beginning of the 19th century, mainly the Chartered Gas Light and Coke Company (GLCC) , which was the first and largest of the gas undertakings worldwide. Gas companies paved the way for the railroads, but...

Consulting service lines have again become a focus for the Big 4 accounting firms. Since SOX prohibits the provision of many types of non-audit services to audit clients, this means firms and many of their clients must likely choose between an audit and a consulting relationship. We use a...

In this paper, we document 45 specific allegations related to audit deficiencies based on GAAS, as detailed in 141 AAERs and 153 securities class action lawsuits over the violation years 1978–2016. Next, we use these allegations to validate existing popular proxies of audit quality. Of all the...