Auditor style and common disclosure deficiencies : evidence from SEC comment letters
No Thumbnail Available
Authors
Meeting name
Sponsors
Date
Journal Title
Format
Thesis
Subject
Abstract
Prior literature documents that auditor style increases financial statement comparability, implicitly making financial statements more useful to outsiders. Auditor style results from policies and procedures that centralize decision-making within the audit firm. A potential hazard of centralized decision-making is the propagation of decision errors throughout the entity. I predict, and find evidence to suggest, that auditor style is associated with a set of common disclosure deficiencies among clientele as measured by receipt of similar SEC comment letters. Clients also converge in both style and disclosure deficiencies as auditor tenure increases. Further, after changing auditors, clients appear to assume the style and disclosure deficiencies of the subsequent auditor. These results provide the first evidence that auditor style, while potentially a net benefit to users of the financial statements, has potential costs as well.
Table of Contents
DOI
PubMed ID
Degree
Ph. D.
Thesis Department
Rights
OpenAccess.
License
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 License.