We propose that auditor-provided tax services (tax NAS) improve internal control quality by accelerating audit firm awareness of transactions material to the financial statements. Using data from 2004 to 2012, we find robust evidence that companies purchasing tax NAS are significantly less...

Social hierarchy theory predicts that the power and status of an organizational function have a first-order effect on the function's ability to influence outcomes. We find that the rank of the title of the top tax executive is positively associated with tax planning after controlling for...

Regulatory pressure to increase both audit committee financial expertise and board independence has resulted in lower status for audit committees relative to management. This status differential is relevant because expertise and relative status are important determinants of each party's ability...

We investigate whether reviews of transactional filings by the SEC unexpectedly constrain SEC resources leading to lower quality comment letters for periodic reports. The Sarbanes Oxley Act requires the SEC to review periodic reports (e.g., 10-Ks) at least once every three years. However, the...

Public accountants are in high demand by non-accounting firms. While this demand attracts high-quality accountants to public accounting, it can negatively impact audit quality via disrupting the audit (e.g., through distraction, reduced motivation to work hard, and human capital loss). We find...

We identify 40 high-profile audit-related negative events involving the Big 4 audit firms from 2008-2017. Auditors experiencing negative events are more (less) likely to lose (gain) clients the following year. This effect is driven by switches to other Big 4 and disappears after two years, and...

Using unique disclosures from the insurance industry, we identify instances where auditors plausibly allow clients to opportunistically utilize discretion in accounting estimates to manipulate losses to reported profits (i.e., auditor lenience). Auditing standards and SEC guidance state that...