We provide a comprehensive overview of shareholder litigation against auditors since the passage of the PSLRA. The number of lawsuits per year has declined, dismissals have increased, and settlements in recent years have declined. Our study asks why. Because we find that the likelihood an...

A widely held assumption in policy making and empirical research is that increasing the strength of public enforcement improves financial reporting quality and audit quality. This paper provides a more nuanced view. In a model with a manager who can manage earnings, a strategic auditor, and an...

Advanced audit data analytics tools allow auditors to analyze the entire population of accessible client transactions. Though this approach has measurable benefits for audit efficiency and effectiveness, auditors caution that it does not incrementally increase the level of assurance expressed...

We examine the association between country-level government quality and firms' choice of external auditors. Using a cross-sectional sample of 142,193 firm-year observations from 46 countries over 1998-2007, we show that the government quality of a country has a significant positive effect on the...

In light of the growing importance of internal audit functions (IAF) and the limited archival evidence on internal audit quality, we examine an interactive model of IAF quality (comprised of competence and independence) to better understand the determinants of IAF effectiveness as financial...

This paper studies the effects of disclosing the audit engagement partner's identity on individual and partnership incentives and overall audit quality. We model a collective decision problem, incorporating individual engagement partners' preferences with the partnership's choice of internal...

Auditors increasingly employ technologies to improve audit quality. Using a design science approach, we examine whether using drones and automated counting software can improve audit quality and thereby improve financial reporting. We assess three dimensions of audit quality—efficiency,...

Prior studies of the effect of regulatory monitoring on audit quality focus on regulatory sanctions but ignore regulatory investigations. We hand-collected data on the China Securities Regulatory Commission (CSRC) investigations announced during 2001–2015 to examine the impact of CSRC...

This paper examines the effect of auditors with government experience on audit quality using 1,067 firm*year observations between 2008 and 2015 from Borsa İstanbul firms. We use three measures of audit quality to test the effect of auditors with government experience. Government-experienced...

This paper studies whether and how Big-4 firms provide higher quality audits than non-Big-4 firms. Specifically, we first examine a Big-4 effect and then explore three sources of the Big-4 effect. To test the Big-4 effect, we use a unique dataset of individual audit partners for a large sample...