Starting in October 2013, auditors of premium-listed firms in the UK are mandated to prepare an expanded audit report that provides details on audit procedures, main risks of material misstatement (RMMs), and materiality thresholds. We hypothesize that the expanded audit disclosures decrease...

Starting in October 2013, auditors of premium-listed firms in the United Kingdom are mandated to prepare an expanded auditor’s report that provides details on audit procedures, risks of material misstatement (RMMs), and materiality thresholds. This regulatory change is important to study,...

I identify the effects of personal relationships on loan contracting using executive deaths and retirements at other firms as a source of exogenous variation in executive turnover. After plausibly-exogenous turnover, borrowers choose lenders with which their new executive's have personal...

Multinational corporations (MNCs) hire auditors to assess business partners’ compliance with quality, working conditions, and environmental standards. Independent third-party auditors are widely assumed to outperform second-party auditors employed and thus controlled by MNCs. However,...

We study regulation of the auditing profession in a model where audit quality is unobservable and enforcing regulation is costly. The optimal audit standard falls short of the first-best audit quality, and is increasing in the riskiness of firms and in the amount of funding they seek. The model...

Prior research has shown that auditors who learn superiors' views before making their own judgment are influenced by them (e.g., Peecher 1996; Tan et al. 1997; Cohen and Trompeter 1998; Brown et al. 1999; Wilks 2002). We use the theory of motivated reasoning (Kunda 1990, 1999) to examine the malleability of...