Trusting/Distrusting Auditors’ Opinions

Auditors ’ Reliance

The purpose of the current study is to examine the degree of reliance external auditors are willing to place on the work of the internal audit function (IAF) when the IAF's objectivity might be compromised. Experienced external auditors (N = 142) participated in a 2 (reporting relationship: audit committee of the board of directors [ACBOD] or chief finance officer [CFO]) by 2 (IAF involvement i...

Are large auditors more accurate than small auditors ?

.•\bstract—Theoretical research suggests that large auditors have more incentive to issue accurate reports compared to small auditors (DeAngelo. 1981; Dye, 1993). Controiling for the client characteristics of large and small auditors, this paper shows that large auditors issue reports that are more accurate and more informative signals of financial distress. These findings are consistent with t...

The Significance of Local Auditors/Evaluators

Do Auditors Objectively Evaluate Their Subordinates’ Work?

In this study, we investigate whether audit managers’ assessment of the quality of work their subordinates perform is influenced by the managers’ prior impressions of these subordinates, and whether managers whom the firm considers outstanding are less susceptible to such an effect. We conduct an experiment using actual audit senior-manager teams. Each senior and manager participating in the ex...

Independent Auditors, Bias, and Political Agency

This paper analyzes political agency with endogenous information collection and revelation by third-party auditors. While increasing incentives for auditors to provide information straightforwardly improves political control, a small amount of pro-incumbent bias can also be useful for maintaining high levels of control. When the equilibrium level of control is high, most investigations uncover ...