Purpose: The value of an audit lies in its ability to detect and correct misstatements in financial statements. The purpose of this paper is to investigate the resolution of detected misstatements. Design/methodology/approach: Using data on a large sample of audit adjustments by a German Big 4...

This paper analyses the expected benefits and costs associated with changes to the institutional framework of statutory audits. We focus on five changes: Mandatory external audit firm rotation, auditor appointment by an independent regulator, a general ban on providing non-audit services, a ban...

The value of an audit lies in its ability to detect and correct misstatements in financial statements. This study investigates the resolution of detected misstatements. Using data on a large sample of audit adjustments by a German Big 4 audit firm, this paper reports an analysis of the factors...