Auditors and Client Investment Efficiency

• 成果类型: Article
• 署名作者: Bae, Gil Soo; Choi, Seung Uk; Dhaliwal, Dan S.; Lamoreaux, Phillip T.
• 署名单位: Korea University; University of Arizona; Arizona State University; Arizona State University-Tempe
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr-51530
• 发表日期: 2017
• 页码: 19-40
• 关键词: cash flow; big 4; QUALITY; earnings; COMPETITION; decisions

摘要

This study examines the relation between auditors and their clients' investment efficiency. We hypothesize and find that auditor characteristics that proxy for an auditor's knowledge and resources are associated with higher client investment efficiency, after controlling for the auditor's effect on financial reporting quality. This result is consistent with auditors providing informational advantages to their clients in a generalized investment setting. We find that this auditor effect is more pronounced for clients who have a higher demand for information as measured by client size, industry competition, and client complexity. The effect is also more pronounced for clients of longer-tenured auditors. Overall, the results suggest that auditors may be one component to the management information environment and, as such, appear to influence capital investment behavior.