Auditor Style and Common Disclosure Issues: Evidence from SEC Comment Letters

ABSTRACT Policies and procedures that centralize decision making within an audit firm create auditor style effects. Prior research suggests this increases financial-statement comparability, implicitly financial statements more useful. However, a potential hazard of is the propagation errors. We examine association between common disclosure issues among clients. measure as presence use comments given in Securities Exchange Commission’s (SEC’s) filing-review process to occurrence issues. find associated with Big 4 clientele. also clients same converge tenure some evidence assume subsequent auditor. These results provide first has costs form Data Availability: All data are publicly available. JEL Classifications: M41; M42.