AbstractResearch Question: Does the introduction of Key Audit Matters (KAMs) increase audit quality and reduce agency cost associated with it? Does the introduction of KAMs decrease Earnings Management (EM) and agency cost associated with it?Motivation: There have been many studies in the past...

In this paper, we document 45 specific allegations related to audit deficiencies based on GAAS, as detailed in 141 AAERs and 153 securities class action lawsuits over the violation years 1978–2016. Next, we use these allegations to validate existing popular proxies of audit quality. Of all the...

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...

This paper investigates whether the differences in audit quality between Big 4 and non-Big 4 auditors can be attributed to the client’s pre-audit financial reporting quality or to the differences in audit treatment via audit adjustments. Hand-collected pre-audit and audited financial statement...

Audit fees are deemed as one of the factors that might influence the perceptions of public toward external auditors. The problem statement concentrated if there is a significant relationship between audit fees and audit quality through the mediators: total assets, origin of company, audit-firm...

We examine whether greater gender and ethnic diversity of an office’s audit partners influences the retention of the office’s audit professionals and the quality of the audits conducted by the office. Using hand-collected data on audit partners, we find that greater diversity in audit office...

Large accounting firms invest considerable resources into employee talent, yet we know little about whether, and when, such policies affect audit outcomes. Economic theory predicts policies that alter firm culture may be more impactful to organizational performance. Therefore, I investigate...

We study what determines the involvement of component auditors in multinational enterprise (MNE) group audits and the association with audit quality and audit fees. Using unique Australian disclosures of group audit fees paid to the principal and component auditors, we first document that MNE...

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...

This paper examines (1) whether the presence of foreign shareholders and foreign directors enhances audit quality using metrics such as auditor size and audit fees; and (2) whether the relationship between foreign monitors and audit quality is particularly greater when agency problems between...