Asymmetric verification takes into account both the type of news (i.e., good versus bad news) and the level of uncertainty regarding that news. Good news should be more certain (i.e. more verifiable) before it is reflected in earnings than bad news. To test this principle, we use data from...

In this paper, we first develop a model in which national legal environments play a crucial role in determining auditor effort and audit fees. Our model predicts that: (1) audit fees increase monotonically with the strength or strictness of a country’s legal liability regime; (2) given a legal...

Following large-scale auditor consolidations in the late 1980s and early 1990s, along with Arthur Andersen's collapse in 2001, the global audit market has become highly concentrated during the past 30 years. Many interested parties, including regulators, researchers, and practitioners, disagree...

We study the effects of cross-listings on audit fees. We first develop a model in which legal environments play a crucial role in determining the auditor's legal liability. Our model and analysis predict that auditors charge higher fees for firms that are cross-listed in countries with stronger...