The 2001 to 2002 corporate scandals led to the Sarbanes–Oxley Act and to various amendments to the U.S. stock exchanges’ regulations. We find that the announcement of these rules has a significant effect on firm value. Firms that are less compliant with the provisions of the rules earn positive abnormal returns compared to firms that are more compliant. We also find variation in the response ac...

This study examines how lawsuits against auditors affect the audit pricing and client acceptance strategies of both the audit offices responsible for the failed audit and other audit offices of the same audit firm. We find that non-litigation offices of litigation audit firms decrease their fees following the filing of a lawsuit. However, audit offices involved in litigation increase their audi...

Executives are ‘affiliated’ if they previously worked for their companies’ audit firms. I find most affiliations (71.3%) occur when auditors become employees of audit clients (‘employment affiliations’), but affiliations also arise when companies hire executives’ former CPA firms (‘alma mater affiliations’). Affiliated companies are significantly more likely than unaffiliated companies to recei...

Abstract Protectionism is on the rise. Although it tends to be associated with tariffs imports, governments are increasingly applying other mechanisms influence international business. Import substitution initiatives have been used replace purchases from foreign producers local alternatives. Russia implemented import through legislative layering where layers of regulation created requirements t...

This article searches for and defines efficient regulation of the provision of non-audit services by auditors to their audit clients. From an examination of the particular problems posed by these services it is concluded that they reduce total costs, increase technical competence, and motivate more intense competition. Furthermore, they do not necessarily damage auditor independence or the qual...