... for clients with higher ex ante litigation risk. Overall, our evidence suggests that the threat of litigation provides an incentive rather than a disincentive for auditors to issue adverse internal control opinions for clients with higher litigation risk. Data Availability: The data are available...

...Cory A. Cassell; Michael S. Drake; Travis A. Dyer SUMMARY We investigate whether auditors are sensitive to litigation risk related specifically to having greater numbers of institutional investors that hold the common stock of a given client. Our findings suggest that audit fees are higher when...

... also find that the negative relation between auditor quality and the likelihood of tax aggressiveness is more pronounced in countries where investor protection is stronger, auditor litigation risk is higher, the audit environment is better, and capital market pressure is higher. JEL Classifications...

...Jeff P. Boone; Inder K. Khurana; K. K. Raman SUMMARY In this paper, we examine the relation between auditor litigation risk and abnormal accruals over the 1989–2007 time period. We address potential endogeneity in prior studies by jointly modeling abnormal accruals and litigation risk...