Audit Quality and Auditor Reputation: Evidence from Japan

We thank Joachim Gassen (AAA discussant), Kazuo Kato, Urooj Khan, Thomas Lys, Yosh Matsumoto, Masumi Nakashima, Tomomi Takada, Stephen Taylor, Joe Weber, Steve Kachelmeier and John Harry Evans III (editors), the two anonymous reviewers, and workshop participants at the 2009 AAA Annual Meeting in New York City, Boston University, University of Edinburgh, Emory University, Harvard Business School, London Business School, Manchester Business School, University of Melbourne, Massachusetts Institute of Technology, the 2009 NUS-Notre Dame CARE Conference, The Ohio State University, University of Washington, Yale School of Management Summer Accounting Conference, and Wharton School of Business for helpful comments on previous versions. We also thank Robert Eccles, Masako Egawa, Michael Krzus, Andrew Popham, Reiko Sato, Yoshiko Shibasaka, Hanado Yasuhito, Nabuo Sato, the staff of the Certified Public Accountants and Auditing Oversight Board at the Japan Financial Services Authority, and the staff of the Harvard Business School Japan Research Office for their valuable assistance in helping us understand the Japanese audit industry. Gang Huang, Kei Ikenishi, Kei Kondo, Allan Sumiyama, and Alice Thieu provided valuable research assistance. We are grateful to the Initiative on Global Markets at The University of Chicago, Booth School of Business for financial support.

Editor's note: Accepted by John Harry Evans III, with thanks to Steven Kachelmeier for serving as editor on a previous version.