Conventional wisdom suggests that audit risk disclosure improves the quality of audited financial reports because the disclosure reduces information asymmetry between investors and companies. In contrast, we show that audit risk disclosure provides companies with another channel to influence...

In March 2020, Covid-19 was declared a pandemic by the World Health Organization. Most European governments reacted with lockdowns. A drop in demand as well as supply disruptions affected the economy which also hit European banks with quite a lot of uncertainty, not only regarding possible...

Financial restatements have significant implications for auditor-client relationships. We estimate that a restatement increases the odds of an auditor resignation dramatically. Restatements involving fraud, reversing profit to loss and those disclosed in press releases appear to drive the...

When there is high information asymmetry between directors and managers, independent directors do not have enough information to perform their functions. Only when faced with a good internal information environment can such directors acquire enough information to provide advice and monitor...

This paper assesses the effects of auditor dismissals and resignations on audit fees and, in particular, whether companies pay more or less for their audits around these events. We also test the hypotheses that the fee discount around a dismissal can be explained by the benefits of auditor...

Securities regulators around the world are considering the costs and benefits of alternative policies for providing information to financial markets on corporate internal control. These policy options differ on the level of auditor involvement, among other dimensions. We examine the association...