Between 1982 and 1987, the Australian audit market experienced an increase in price competition resulting from changes in professional rules governing advertising and marketing practices as well as the introduction of widespread audit tendering. Because these changes are generally assumed to...

This study provides evidence that auditors adopted risk-management policies in the early 1990's in order to reduce their exposure to legal liability. Specifically, there is evidence that their clienteles became less risky and evidence of more conservative auditor reporting policies by non-Big 6...

We document that firms have greater earnings similarity, relative to same-city industry peers, as the number of local peers increases. However, we also show that this mimicking behavior creates a false similarity and is achieved by firms reporting higher levels of unexpected accruals. These...

Mandatory auditor rotation was recently proposed for the European Union and is also under consideration in the United States. There has been little research into either the benefits or costs of rotation in a true mandatory setting that could inform intelligent policy making. Our paper helps fill...

We exploit a proprietary government database to identify Italian firms with alleged ties to the Mafia through their executives, directors, or shareholders. We assume that the accountants who work as auditors for these organizations are also corrupt, and term these individuals “suspect...

The concept of “audit quality” is of fundamental importance in auditing but there is little agreement on its definition or measurement. I review several approaches to understanding audit quality and argue that the most meaningful measure of audit quality is based on what the auditor is...