This experimental study analyses whether reporting an accounting estimate as a key audit matter (KAM) can influence auditors' judgment about the reported estimate under the varying condition of implicit or no client pressure. Using the theory of moral licensing, motivated reasoning and...

Over the past several decades, the scope of public companies' operations has become increasingly global. This has led to concern over the ability of audit firms to conduct high-quality audits across geographically dispersed foreign operations. We contribute to the growing body of research in...

Due to its necessity of analytical thinking and knowledge of business sciences, the accounting profession doesn't require muscle strength but definitely requires a powerful brain. Also, due to the variety of clients and their industry and firm-specific specific expertise, the auditor doesn't...

This research investigates the effect on audit quality of concentrated public company financial statement filing deadlines in audit offices. Audit offices must effectively manage their resources to meet their clients' audit service demands. For audit offices with clients that have filing...

I conduct an experiment with professional auditors on how an inspection's focus on procedures performed versus judgment quality influences an auditor's mindset, and in turn, how that mindset affects auditor judgments and decisions. I study mindset effects on an auditor's evaluation of a complex...

Using a comprehensive sample of audits for public companies in China, we demonstrate whether and how bad audit behavior spreads among individual auditors (i.e., CPAs). CPAs are deemed to be “diseased” during the period when their audits fail, and are subsequently sanctioned by the...

Auditors have difficulty evaluating the assumptions underlying management's estimates. One source of these problems is that auditors appear to dismiss evidence contradicting management's assumptions because their initial preference to support management's accounting biases their preliminary...

The value of an audit lies in its ability to detect and correct misstatements in financial statements. This study investigates the resolution of detected misstatements. Using data on a large sample of audit adjustments by a German Big 4 audit firm, this paper reports an analysis of the factors...

The way that auditors and their clients develop team resources that they can later use in negotiating with their counterparts is a critical but unexplored issue in auditing research. This study explores several important issues that may affect the development of these team resources....