Auditor Style and Financial Statement Comparability

• 成果类型: Article
• 署名作者: Francis, Jere R.; Pinnuck, Matthew L.; Watanabe, Olena
• 署名单位: University of Missouri System; University of Missouri Columbia; University of Melbourne; Iowa State University; University of Technology Sydney
• 刊物名称: ACCOUNTING REVIEW
• ISSN/ISSBN: 0001-4826
• DOI: 10.2308/accr-50642
• 发表日期: 2014
• 页码: 605-633
• 关键词: agency costs; earnings management; QUALITY; association; opinions; services; accruals; Clients; income; fees

摘要

The term audit style is used to characterize the unique set of internal working rules of each Big 4 audit firm for the implementation of auditing standards and the enforcement of GAAP within their clienteles. Audit style implies that two companies audited by the same Big 4 auditor, subject to the same audit style, are more likely to have comparable earnings than two firms audited by two different Big 4 firms with different styles. By comparable we mean that two firms in the same industry and year will have a more similar accruals and earnings structure. For a sample of U.S. companies for the period 1987 to 2011, we find evidence consistent with audit style increasing the comparability of reported earnings within a Big 4 auditor's clientele.