Prior research suggests that Big 4 auditors provide higher quality audits by virtue of their large size. Still, the recent reforms mandated by the Sarbanes Oxley Act – by increasing client and auditor incentives for accurate reporting – may have narrowed audit quality differences across...

In this paper, we examine audit quality for Big 4 and Second-tier auditors during 2003-2006. We utilize the auditor's propensity to issue a going concern audit report for distressed clients as a measure of audit quality. In addition, since the purpose of an audit is to improve financial...