Tag Archives: audit

To Centralize or Not: Control Right Allocation and Auditor Incentives 

By | March 1, 2023

A corporation is a nexus of incomplete contracts that gives a demand for control right allocations. Whether firms should centralize or decentralize control rights depends on local information and coordination. This study uses the audit industry in China as a laboratory to shed light on to what extent control right allocation within an organization affects… Read More »

Can Increased Competition Among Audit Firms Harm Audit Quality? 

By | July 28, 2022

Understanding how audit market competition affects audit quality is of significant interest to academics, practitioners, and regulators, with important capital market and policy implications. Regulators around the world have expressed concerns that companies have too few choices in the audit market and believe that the lack of choice is resulting in low competition. As a… Read More »

How is the Audit Market Affected by Characteristics of the Non-Audit Services Market

By | July 20, 2021

Researchers, regulators, and practitioners have long-standing concerns about the negative effects of non-audit services (NAS) on audit quality. On the one hand, payments for NAS by client firms can impair auditor independence and motivate auditors to ignore client deficiencies. On the other hand, knowledge transfer across audit and NAS employees at the same firm can… Read More »

The Importance of Firm-Specific Knowledge in Audit Committee Chair Successions

By | June 2, 2021

The audit committee chair is considered the cornerstone of the audit committee. Charged with directing the committee’s activities, the chair sets the agenda and presides over its meetings. The chair must ensure that committee members focus on key issues and fulfill their roles as part of the group. The chair also acts as the liaison between the… Read More »