We examine the auditor perception of recognized vs. disclosed obligations as they relate to two key decisions auditors make: determining audit fees and whether to issue a going concern opinion. We study two pairs of obligations – capital leases and operating leases and on-balance sheet and...

Recent research challenges the notion that the Big 4 auditors provide a higher quality audit relative to non-Big 4 and suggests that the Big N effect could be due to self-selection. We contribute to this debate by controlling for pre-audit earnings quality, an important omitted variable in prior...