Purpose: There has been growing concern worldwide regarding audit quality in Japan after the Kanebo and Olympus accounting scandals. The purpose of this paper is to examine the Japanese audit market from 2001 to 2011 to determine whether audit quality differs between Big N and Non-Big N audit...

This note introduces an example where a typical credit crunch regression fails to detect significant effects of borrowing constraints embedded in a dynamic general equilibrium model. The failed estimation result remains robust even if the regression is based on a large sample.