The Public Company Accounting Oversight Board (PCAOB) and the International Auditing and Assurance Standards Board (IAASB) and UK Financial Reporting Council (FRC) have proposed or approved standards that significantly change the independent auditor's report. These initiatives require the...

We investigate the social and legal blame that investors assign to auditors following unfavorable outcomes using the precision of accounting guidance described as principles-based (i.e., less-precise) or rules-based (i.e., more precise), and why investors assign blame at differing levels. We...