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...

Deloitte's 2007 PCAOB Part II report identifies, among other issues, concerns related to the audit firm's quality controls with respect to auditing income tax accounts. We investigate whether Deloitte's actions to remediate the PCAOB's concerns are associated with changes to their clients'...