Conventional wisdom holds that joint audits would improve audit quality by enhancing audit evidence precision, because “Two heads are better than one,” and by enhancing auditor independence, because it is more expensive for a company to “bribe” two audit firms than one. Our paper...

Conventional wisdom suggests that audit risk disclosure improves the overall efficiency because investors are more informed of a client's financial performance. This view, while intuitive, ignores a potential externality of audit risk disclosure on auditor competence. We consider a two-period...

This study investigates the effects of mandatory audit risk disclosure on audit quality, audit fees, and investment efficiency. We consider a two-period model wherein an auditor acquires private information about a company’s risk of material misstatement, thereby reducing the detection risk....

Conventional wisdom suggests that partner identification disclosure can improve audit quality, because it may enhance transparency and individual accountability. Building on a two-period assignment model, we show that under certain conditions, the disclosure can distort partner client assignment...

Conventional wisdom suggests that audit risk disclosure improves the quality of audited financial reports because the disclosure reduces information asymmetry between investors and companies. In contrast, we show that audit risk disclosure provides companies with another channel to influence...

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...