We use data from China to examine whether regulations that limit management influence over auditors improve audit quality. China's State-owned Assets Supervision and Administration Commission of the State Council (SASAC) issued two rules in 2004 aimed at improving audit quality for state-owned...

We examine the association between country-level government quality and firms' choice of external auditors. Using a cross-sectional sample of 142,193 firm-year observations from 46 countries over 1998-2007, we show that the government quality of a country has a significant positive effect on the...

We examine client stock market reaction to news of PCAOB sanctions imposed upon Deloitte and Touche, LLP - the first against a Big 4 auditor. The PCAOB Order against Deloitte contains three potentially value relevant pieces of information. First, it shows that Deloitte did not conduct a quality...

This paper examines the 2017 audit inspection scandal involving KPMG — one of the fewbreaches of “tone at the top” at a Big 4 audit firm — to study whether and how the scandal affectsKPMG and its clients. From the federal court trial related to the scandal, we construct a novel dataset...

The purpose of this study is to analyze whether engagement quality control review (EQCR) hours affect auditor changes and whether abnormal audit fees and changes in management have moderating effects on the relation between EQCR hours and auditor changes. The logit regression model is designed...

We investigate the impact of remote auditing on audit quality and the good practices undertaken by auditors to improve audit quality in remote auditing. The outbreak of the COVID-19 pandemic in China provides an opportune testing ground for analyzing the impact of remote auditing on audit...

Using a game-theoretical model, we examine reasons and driving forces for audit firm split-ups, like the case of EY. In addition, we also analyze the potential consequences of audit firm split-ups on both the audit market and the audit quality. We find that the split-up decision is mainly driven...

We conduct two experiments using experienced audit partners as participants to investigate whether engagement partners’ involvement in the client acquisition process as the contact partner can influence their subsequent audit judgments, and whether the engagement quality review partner’s...

Much of the literature develops theory using audits of publicly owned companies with agency costs that create demand for audit quality. In contrast, I study auditor size and industry specialization in the broker-dealer (BD) industry, where entities have weak incentives to demand and supply high...

The present paper aims to provide empirical evidence regarding the impact of shareholder activism on earnings management. Specifically, it is focused on investigating the moderating role of an external governance mechanism such as external audit quality. Based on a sample of French companies...