We study how informed, strategic trading affects audit quality and investment efficiency. With the auditor's legal liability payment based on the decrease in the market price after an audit failure, informed trading provides a hedge to the auditor against legal liability risk. This weakens...

A vignette study of 567 client acceptance decisions by 67 Dutch auditors showed that the prospect of acquiring additional assignments significantly increases the likelihood that auditing partners accept an audit assignment from a new client, thereby violating a rule of the auditing profession....

We examine whether auditors effectively incorporate cues indicating increased risk into their evaluation of fair value estimates. Consistent with concerns from PCAOB inspections, more than one-third of fair value estimates in our security-level dataset differ from the true fair value by an...

This study examines auditor sharing by mutual fund trusts (collections of mutual funds) and parents (administrators of fund operations). We examine the determinants of auditor sharing and whether an association exists between trust audit fees and auditor sharing. Employing a sample of 2,369...

Given the relative nascency of digital assets, we provide auditing faculty, students, and practitioners with a holistic overview of digital assets. We first place digital assets within the context of money and describe the microstructure of a transaction using crypto-assets. We then focus on the...

Prior research shows that the accounting and financial reporting quality of startups and early-stage firms is lower than that of public firms and firms later in their life-cycle. A growing source of financing for these startup and early-stage firms is equity crowdfunding. This paper provides...

We analyze the impact of cross-audits between companies and mutual funds on auditors' reporting decisions. We document that companies are more likely to receive favorable audit opinions when they appoint the same auditor as their mutual fund blockholders. In cross-sectional evidence consistent...

Decentralized finance (DeFi) represents a large capital market where users conduct transactions primarily through digital smart contracts. These contracts are susceptible to cyber-attacks and coding errors that can result in significant financial losses, which has led to the emergence of smart...

This study examines the factors that lead to issuing negative opinions on semiannual reports while issuing positive opinions in annual reports from the perspective of auditor-client relationships in listed companies in Taiwan. The empirical results show that the importance of the client is...

We examine which of two opposing financial reporting incentives that group-affiliated firms experience shapes their accounting transparency evident in auditor choice. In one direction, complex group structure and intra-group transactions enable controlling shareholders to pursue diversionary...