This study investigates whether audit litigants act as if they believe jurors will associate auditor-provided nonaudit services (NAS) with impaired auditor independence, and thus substandard auditor performance. Using GAAP-based financial statement restatements disclosed from 2001 – 2007 as an...

Although the Sarbanes-Oxley Act of 2002 imposes internal control disclosure and certification requirements on management, regulators are concerned that companies are not disclosing material internal control weaknesses on a timely basis. This study investigates whether litigation risk could act...

Using information accompanying the audit committee (AC) member voting recommendations of a proxy advisory service, we examine the circumstances that condition when and why ineffective AC members experience subsequent turnover from the board of directors. We broadly classify the sources of...

This study investigates whether auditor quality and audit committee expertise are associated with improved financial disclosure timeliness as measured by the duration of a financial statement restatement's “dark period.” The restatement dark period represents the length of time between a...

According to auditing standards, explanatory language added at the auditor's discretion to unqualified audit reports should not indicate increased financial misstatement risk. However, an auditor is unlikely to add language that would strain the auditor-client relationship absent concerns about...

Prior research indicates that expanded audit reports, which disclose financial statement matters that involved especially challenging, subjective, or complex auditor judgment (known as critical audit matters [CAMs] in the U.S.), have fallen short of their objective to provide investors with...

In an effort to make audit reports more informative to investors, the U.K. recently passed a new audit reporting standard that requires auditors to disclose the risks of material misstatement (RMMs) that had the greatest effect on the financial statement audit. Using short-window market...

In this study, we use a survey instrument to obtain perspectives from over 700 auditors about present-day audit workloads and the relationship between audit workloads, audit quality, and job satisfaction. Our findings indicate that auditors are working, on average, five hours per week above the...

Prior research finds that companies committing fraud exhibit large inconsistencies between reported revenue growth and growth in revenue-related nonfinancial measures (e.g., number of stores, employees, patents). However, prior research also suggests that auditors, on average, are not adept at...

The remediation of Securities and Exchange Commission (SEC) comment letters can impose significant costs on companies. This study examines whether auditor involvement in the SEC comment letter process expedites comment letter resolution. Such a finding would indicate that auditors add value...