Managerial litigation risk and auditor choice
نویسندگان
چکیده
Our study investigates the causal relationship between managerial litigation risk and auditor choice decisions. Exploiting staggered adoption of universal demand (UD) laws at state level in United States, we use a stacked regression approach find lower propensity for affected firms to switch higher-quality auditors after exogenous reduction risk. This result supports entrenchment hypothesis that leads more entrenchment, which allows managers be opaque order enjoy private benefits. negative effect is mitigated with audit committee industry expertise are reliant on external finance. contributes our understanding how regulatory changes have an impact agency problems affect firms' auditing.
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ژورنال
عنوان ژورنال: International Journal of Auditing
سال: 2023
ISSN: ['1099-1123', '1090-6738']
DOI: https://doi.org/10.1111/ijau.12322