In recent years, audit profession was confronted with different regulations, revised rules on non-audit services (NAS) and on auditor independence. In depth, professional accountancy bodies amended their independence rules according to Sarbanes-Oxley Act of 2002. For instance, the Securities...

This paper investigates the monitoring effect of institutional investors on portfolio firms' audit quality. We identify an exogenous discontinuity in institutional ownership around the Russell index threshold to overcome the endogeniety concerns. We find that an exogenous increase in a firm's...