In this paper, we study spatial competition in the U.S. audit market while accounting for its two-tiered nature. We provide evidence on the differential impact that market share distances within and between the players in the large and small audit markets have on competition. We find that the...

This study examines the determinants and consequences of tax service provider choice among not-for-profit (NFP) organizations. Understanding how clients choose among professional services firms for tax services is important both because of the economic significance of tax service revenues to...

Financial restatements are costly, but frequent, events and many firms restate several times. This paper asks why rational managers engage in misreporting, in spite of the costly consequences. We present a simple extension to the Fischer and Verrecchia (2000) model, which provides testable...

We examine whether Deloitte's spatial location in local audit markets affected the firm's adverse fall-out - in terms of decreased ability to retain new clients and maintain audit fees - from the 2007 PCAOB censure. We motivate our inquiry by the notion that auditor-client alignment and...

The IAASB maintains that expert assurance practitioners are unable to quantify limited assurance achieved for nonfinancial information and presumes users can read practitioner-customized procedure descriptions to differentiate information reliability between “inconsequential” and “high.”...

We investigate the impact of the Public Company Accounting Oversight Board's (PCAOB) first-time inspections of foreign accounting firms by examining abnormal accruals around the inspection year, and the value relevance of accounting numbers around the inspection report date, for their U.S....

Purpose – Prior literature provides clear evidence that the judgments of experts differ from those of non-experts. For example, Smith and Kida concluded that the extent of common biases that they investigated often are reduced when experts perform job related tasks as compared to students. The...

We consider accounting from an evolutionary perspective. Accounting encompasses the creation of transactional records, the summarization of records in t-accounts, and the preparation of audited financial statements. Accounting's history spans at least 10,000 years dating back to the first human...

This study examines audit partners' predictions of the ability of managers and seniors to detect financial statement errors. If partners are unable to predict the ability of their subordinates to detect errors, audit effectiveness may be affected. Audit partners were asked to predict which...

Incentives affect the manner in which auditors conduct their audits and one important research question is how different types of incentives affect behavior. The objectives of this paper are to examine how auditors' intrinsic motivation could be augmented by their participation in developing the...