Auditing standards and anecdotal evidence suggest that accounting personnel's lack of financial reporting competencies can increase audit risk. This study draws on human capital theory to measure the quality of accounting personnel based on their education level and obtains evidence of how the...

Using proprietary information about Chinese audit firms’ Professional Risk Fund (PRF) and Professional Indemnity Insurance (PII) and their publicly traded clients’ audit adjustments, we examine whether and how audit firms’ PRF and PII relate to audit adjustments. We find that audit...

This study develops machine learning models to predict audit quality by using a wide range of data describing detailed characteristics of accounting firms, individual audit partners, and public companies in China. It constructs the surprise score, a new measure of audit quality, calculated as...

Using a shock to the Chinese capital market and unique and detailed audit-adjustment data, this paper investigates the effect of a capital-market liberalization program on auditors' adjustments to their clients' financial reports. Employing difference-in-differences tests with propensity-score...