We present the first large-sample empirical evidence on U.S. auditors' responses to changes in entity-level audit risk during 2006-2007, the period leading-up to the financial crisis of 2008-2009. Treating fiscal year 2005 engagements as a pre-crisis benchmark, we find that audit attention...

Litigation poses a significant business risk for auditors. We argue that auditors learn from other auditors' litigation events and examine the consequences of such events for future accounting misstatements. Using a hand-collected sample of auditor litigation events, we find a significant...

Regulators have long expressed concerns about auditor changes and the detrimental impact of opinion shopping on the audit market. While prior studies have examined how single-instance auditor switching impacts audit outcomes, we examine whether frequent auditor switching impacts audit outcomes....