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...

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...