... to partly explain the “Big 4 effect” on audit outcomes: after controlling for the effects of matching, we find that the positive influence of having a Big 4 auditor on serious restatements and serious comment letter conversations with the SEC either weakens or disappears. Collectively, our results highlight...

...Thomas Bourveau; Matthias Breuer; Jeroen K. G. Koenraadt; Robert Stoumbos ABSTRACT We describe the development of public company auditing in the U.S. in the early 20th century to gain perspective on current developments in environmental, social, and governance (ESG) assurance. Using a broad sample...

...Ole-Kristian Hope; Haihao Lu (Ross); Songlan Peng (Stella) ABSTRACT In 2014, the PCAOB adopted a new auditing standard, AS 18 Related Parties, with the intention of enhancing auditors’ performance in auditing related-party transactions (RPTs). Using hand-collected data, we find...

...Raphael Duguay ABSTRACT I evaluate the effect of financial statement audits on the governance practices of nonprofit organizations. Using a regression discontinuity design that exploits revenue-based exemption thresholds, I find that financial audits cause organizations to implement governance...

...Derek K. Chan; Nanqin Liu ABSTRACT We study the effects of the disclosure of critical audit matters (CAMs) on an auditor’s audit effort and an investor’s scrutiny effort decisions and on investment efficiency. Both the auditor and the investor can prevent a bad investment by respectively auditing...

...Brandon Gipper; Luzi Hail; Christian Leuz ABSTRACT We analyze the effects of partner tenure and mandatory rotation on audit quality, pricing, and production for a large cross-section of U.S. public firms during 2008–2014. On average, we find no evidence that audit quality declines over the tenure...

... suggests that auditing firms located in corrupt areas entails additional risk, which auditors price into fees. JEL Classifications: D73; G31; G34. We thank Venky Nagar (editor), two anonymous referees, Ranjan D'Mello, Sudhir Jaiswall, Min-Jeong Kwon, Cheol Lee, Elliot Smith, Shawn Thomas, Mark...

... the public sources cited in the text. To test the effect of PCAOB international inspections on companies' corporate finance decisions, I construct a sample of non-U.S. companies that are audited by PCAOB-inspected auditors but are not directly subject to any SEC or PCAOB regulation (e.g., my...

...Nathan H. Cannon; Jean C. Bedard ABSTRACT Concern about effective auditing of fair value measurements (FVMs) has risen in recent decades. Building on prior interview-based and experimental research, we provide an engagement-level analysis of challenging FVMs, using quantitative and qualitative...

...Benjamin P. Commerford; Richard C. Hatfield; Richard W. Houston; Curtis Mullis ABSTRACT In this study, we examine how information foraging by auditors affects audit evidence collection in two distinct contexts, and show how a small change to audit methodology mitigates the potentially harmful...

.... In this paper, we demonstrate—using procurement data from a leading global bank—the value added in an audit setting of a new type of analytical procedure: process mining of event logs. In particular, using process mining, we are able to identify numerous transactions that we consider to be audit-relevant...