We analyze whether information asymmetry affects three major aspects of the audit process using an instrumental variables research design that exploits exogenous increases in information asymmetry stemming from brokerage house mergers and closures. Consistent with our predictions, we find that a...

Literature to date reveals relatively little about the role of expertise in auditor selection beyond basic preferences for Big 4 and industry specialist auditors. We hypothesize that audit committees whose members have no Big 4 auditing experience are likely to struggle when interviewing...

We use hand-collected audit partner data to show that approximately one-third of clients are audited by partners located more than 100 kilometers away from the clients' corporate headquarters. We explore the role that partner location plays in audits by first modeling how it affects the matching...

As part of planning and performing financial statement audits, auditors must assess their clients' risk. Assessed risk permeates the audit process, driving decisions regarding client retention, audit pricing, the extent of audit testing, and the nature of auditors' written opinions. Although...

This study investigates whether audit litigants act as if they believe jurors will associate auditor-provided nonaudit services (NAS) with impaired auditor independence, and thus substandard auditor performance. Using GAAP-based financial statement restatements disclosed from 2001 – 2007 as an...

According to auditing standards, explanatory language added at the auditor's discretion to unqualified audit reports should not indicate increased financial misstatement risk. However, an auditor is unlikely to add language that would strain the auditor-client relationship absent concerns about...