In the modern literature, the audit opinion is defined as a certificate that accompanies the financial statements of companies.The audit opinion is important because it provides an answer as to whether companies' financial statements are free from material misstatement.Although in the Republic...

We examine how auditors’ use of limited liability agreements (LLAs) impact perceptions of private company creditworthiness in a 2×2 between-subjects experiment. Ninety-three United States-based bank loan officers evaluate whether LLA clauses and the size of the company’s external auditor...

The main role of the external auditor in the classical corporate governance scheme is to verify the accounting information provided by the firms’ managers. Lengthy audit engagements are viewed as a main threat to preserve auditor independence, and therefore regulators have established...

The Enron/Arthur Andersen scandal has raised concerns internationally about auditor independence, audit quality, and the need for regulatory action such as mandatory auditor rotation. China's unique institutional features provide us with a setting in which to compare comprehensively the various...

This study investigates the audit firm's decision to protect its partners' personal assets by becoming a limited liability partnership (LLP). We find that the likelihood of an audit firm switching from unlimited to limited liability is increasing in its size and exposure to litigation risk. We...

We examine the association between U.S. audit market structure and both audit price and quality. The significant consolidation of the largest audit firms and its effect on market structure has raised international concern among policy makers. We address this concern by examining the association...

Regulators and the public are concerned about accounting firms lobbying politicians on behalf of their own audit clients because it could impair auditor independence. In this study, we examine whether these lobbying activities by accounting firms are associated with their clients' audit quality....

This study examines the effect of individual auditor quality (below the partner level) on overall audit quality. We aggregate audit employee-level performance evaluations to create a measure of auditor quality at the office level. We find that high quality audit offices are associated with a...

Purpose – This paper investigates the relationship between audit quality (as measured by auditor size and industry specialization) and earnings management (as measured by unexpected accruals) for Taiwan IPO firms.Design/methodology/approach – First uses unexpected accruals in the modified...