Financial reporting quality and audit firms’ past experiences of litigation

This study investigates whether financial reporting quality is affected by an audit firm’s experience of litigation in the recent past. I find that the likelihood of an accounting misstatement and the magnitudes of misstatements are significantly lower for non-Big 4 auditors who recently suffered hi...

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Main Author: Li, Bing
Other Authors: Nanyang Business School
Format: Theses and Dissertations
Language:English
Published: 2012
Subjects:
Online Access:https://hdl.handle.net/10356/50665
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Institution: Nanyang Technological University
Language: English
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spelling sg-ntu-dr.10356-506652024-01-12T10:31:29Z Financial reporting quality and audit firms’ past experiences of litigation Li, Bing Nanyang Business School Clive Lennox DRNTU::Business::Accounting This study investigates whether financial reporting quality is affected by an audit firm’s experience of litigation in the recent past. I find that the likelihood of an accounting misstatement and the magnitudes of misstatements are significantly lower for non-Big 4 auditors who recently suffered high litigation compared with non-Big 4 auditors who did not. In addition, I find an improvement in financial reporting quality subsequent to Big 4 auditors’ recent litigation experiences when the analysis is conducted at the audit office level. These results are consistent with my prediction that litigation has a disciplinary effect on auditors and leads to higher financial reporting quality. DOCTOR OF PHILOSOPHY (NBS) 2012-08-27T07:18:36Z 2012-08-27T07:18:36Z 2012 2012 Thesis Li, B. (2012). Financial reporting quality and audit firms’ past experiences of litigation. Doctoral thesis, Nanyang Technological University, Singapore. https://hdl.handle.net/10356/50665 10.32657/10356/50665 en 57 p. application/pdf
institution Nanyang Technological University
building NTU Library
continent Asia
country Singapore
Singapore
content_provider NTU Library
collection DR-NTU
language English
topic DRNTU::Business::Accounting
spellingShingle DRNTU::Business::Accounting
Li, Bing
Financial reporting quality and audit firms’ past experiences of litigation
description This study investigates whether financial reporting quality is affected by an audit firm’s experience of litigation in the recent past. I find that the likelihood of an accounting misstatement and the magnitudes of misstatements are significantly lower for non-Big 4 auditors who recently suffered high litigation compared with non-Big 4 auditors who did not. In addition, I find an improvement in financial reporting quality subsequent to Big 4 auditors’ recent litigation experiences when the analysis is conducted at the audit office level. These results are consistent with my prediction that litigation has a disciplinary effect on auditors and leads to higher financial reporting quality.
author2 Nanyang Business School
author_facet Nanyang Business School
Li, Bing
format Theses and Dissertations
author Li, Bing
author_sort Li, Bing
title Financial reporting quality and audit firms’ past experiences of litigation
title_short Financial reporting quality and audit firms’ past experiences of litigation
title_full Financial reporting quality and audit firms’ past experiences of litigation
title_fullStr Financial reporting quality and audit firms’ past experiences of litigation
title_full_unstemmed Financial reporting quality and audit firms’ past experiences of litigation
title_sort financial reporting quality and audit firms’ past experiences of litigation
publishDate 2012
url https://hdl.handle.net/10356/50665
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