In this paper, we study spatial competition in the U.S. audit market while accounting for its two-tiered nature. We provide evidence on the differential impact that market share distances within and between the players in the large and small audit markets have on competition. We find that the...

Prior academic and practitioner literature argues that the ethical tone at the top of an organization is a key factor in establishing an effective internal control environment. Drawing on self-concept maintenance theory and in-group bias theory, we predict that entry-level staff auditors will...

Using a sample of key supplier-customer relationships, we investigate whether an auditor common to a supplier and customer firm reduces information asymmetry between the two parties, leading to an increase in relationship-specific investments. We find evidence that the presence of a common...

We provide causal evidence on the agency cost explanation of the demand for high quality auditing. Using brokerage house closures/ mergers as a natural experiment to identify exogenous increases in agency costs arising from information asymmetry, we find that after experiencing exogenous...

Foreign firms cross-listing in the U.S. benefited from increased accounting quality and valuation stemming from the historically more stringent accounting and regulatory environment in the U.S. compared to their home markets. Auditors of these foreign firms, also facing this more rigorous...

The decade-long debate on required book-tax conformity has centered on three areas: the information content of earnings, the incentive to engage in earnings management, and the costs of compliance. While the first two have been studied extensively, studies on the effect that conformity may have...

We study a firm's decisions to engage in socially responsible activities, voluntarily report on them and purchase external assurance of the report. In our signaling model, neither firm type nor the level of activity is observed. We show that if voluntary assurance is not too expensive, the firm...

Purpose: The main aim of this research is to assess the effectiveness of internal governance controls and processes with specific focus on the skills and challenges facing internal auditors operating in Libya when they conduct internal audits. This study also investigates whether Libyan internal...

Proposals for increased transparency and disclosure within audit reports are consistently met with conflict. Some suggest that auditor disclosures increase liability exposure for auditors, and should be the responsibility of management. Others suggest that such disclosures are beneficial to the...

Using a sample of Portuguese audit firms and their client companies, this study examines the association between gender composition of the partnership structure of audit firms and audit quality. Audit quality is measured through the earnings quality of audit clients. We find that gender...