... not issue a GC opinion for an entity that subsequently fails, we study the effects of management disclosure, increased management disclosure responsibility, and auditor disclosure on auditor blame, a proxy for auditor liability. Consistent with predictions based on the Culpable Control Model, we find (1...

... negligent. However, jurors do not perceive a difference in the level of assurance provided when auditors use ADAs versus sampling testing methods. 1 5 2019 1 5 2021 2022 auditor liability audit data analytics audit quality internal controls We are grateful to Christine E...

... findings highlight a quandary for audit firms, where subsequent removal of a CAM increases auditor liability. The PCAOB (2017) recently adopted an auditing standard that creates substantial changes to the auditor's report, including the disclosure of critical audit matters (CAMs), with the intent...

... stringent standards for third-party claims against the auditor for negligence. To test this hypothesis, we analyze a sample of 3,107 loss reserve observations from 1993 through 2004. Our sample is restricted to private insurers that operate in a single state to control for auditor liability under statutory...

... controls to a more top-down risk-based approach. The second change is litigation reform further limiting auditor liability exposure following an alleged audit failure. I find that investors perceive a reduction in audit quality following each of the two regulatory changes. These observed effects...