Does size matter? The influence of large clients on office-level auditor reporting decisions

• 成果类型: Article
• 署名作者: Reynolds, JK; Francis, JR
• 署名单位: University of Missouri System; University of Missouri Columbia; Louisiana State University System; Louisiana State University
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/S0165-4101(01)00010-6
• 发表日期: 2000
• 关键词: information; lawsuits; prices

摘要

Large clients create an economic dependence that may cause auditors to compromise their independence and report favorably to retain valuable clients. Economic dependence is measured as a client's size relative to the size of the office that contracts for the audit and issues the audit report. We find no evidence economic dependence causes Big Five auditors to report more favorably for larger clients in their offices. However, larger clients also pose greater litigation risk, and we do find that Big 5 auditors report more conservatively for larger clients, suggesting that reputation protection dominates auditor behavior. (C) 2001 Published by Elsevier Science B.V.