... findings suggest that a reduced-form approach may overstate the true Big 4 effect on audit outcomes. Although the literature on auditor selection is vast, most prior studies consider a one-sided selection problem, i.e., where auditors provide a product and a price from which client companies are free...

...Mai Dao; K Raghunandan; Dasaratha V. Rama ABSTRACT The Advisory Committee on the Auditing Profession (ACAP), formed by the U.S. Department of the Treasury, has recommended that all public companies be required to have shareholder ratification of auditor selection. Using data from 1,382 firms...