This paper derives the impacts of legal system characteristics and auditing standards on auditor behavior (audit quality), and analyzes the determination of optimal auditing standards under different legal regimes. Legal regimes are characterized by differences in the uncertainty concerning the...

Building on an auction model, we examine the economic consequences of audit retendering, under which the incumbent auditor in auction possesses both an information advantage and knowledge advantage over outside auditors. Audit retendering allows the firm to retain the incumbent auditor with...

This paper shows that politically connected non-Big 4/5 auditors are associated with lower levels of audit quality (proxied by the level of abnormal non-core earnings and the proportion of modified audit opinions) than firms with no political connections. We also show that more economically...