This study explores two potential safeguards against liability when auditors exercise professional skepticism, but do not detect a fraud: (1) a firm policy requiring a specific level of professional skepticism in high-risk audit areas and (2) providing jurors with key differences between the...

The majority of audit litigation research has focused on juror judgments. We examine how jurors' negligence judgments and attorneys' out-of-court settlements are differently impacted by two features of a materially misstated accounting estimate — the amount of estimate uncertainty and whether...

This paper examines how the relative timing affects the quality of financial reports in a staggered reporting system. We show that the audit quality of the leader firm exceeds that of the lagger. Investment efficiency also differs systematically across firms depending on the relative reporting...

Recent research challenges the notion that the Big 4 auditors provide a higher quality audit relative to non-Big 4 and suggests that the Big N effect could be due to self-selection. We contribute to this debate by controlling for pre-audit earnings quality, an important omitted variable in prior...

This study examines how and why the board of statutory auditors, an important accounting institution, has continued to operate from its establishment in 1882 until today, with little change in its nature and role. This is despite the fundamental changes that have occurred in the Italian social,...

Many legal jurisdictions, including the U.S. and U.K., have passed regulations to address the potential negative impacts of a lack of competition and high concentration in public company audit markets. One consequence of increased regulations, desired or not, is that they have presumably...

We hypothesize that companies in the same product market avoid sharing the same audit partner when they are concerned about possible information spillovers. Consistent with our hypothesis, we find that product market rivals are less likely to share the same partner when they perceive that...

We examine whether tax audits become more efficient if tax auditors have access to audited financial statements and information about statutory audit adjustments. We extend the standard tax compliance game by a statutory auditor to analyze the strategic interactions among a firm issuing...

Objective: To analyze the relationship between Critical Audit Matters (CAM) and earnings management practices among Brazilian companies. Method: This study's sample was composed of 96 companies listed in IBRX 100, data of which were collected from the Securities and Exchange Commission (CVM) and...

This paper examines whether the changes in audit rotation policy affect the relationship between audit firm rotation and audit quality in Indonesia. This study uses 2,403 observations from 371 firms listed on the IDX for the period 2010–2017. This study uses Ordinary Least Squares regression...