Client Conservatism and Auditor-Client Contracting

• Main Authors: ZANG, Yoonseok, LIM, Chee Yeow, DEFOND, Mark
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2012
• Subjects: accounting conservatism; auditor litigation; auditor reputation; audit pricing; audit opinion; auditor resignation; accounting restatements; Accounting; Business Law, Public Responsibility, and Ethics; Corporate Finance
• Online Access: https://ink.library.smu.edu.sg/soa_research/1013; https://ink.library.smu.edu.sg/context/soa_research/article/2012/viewcontent/DeFond_20Paper.pdf
• Institution: Singapore Management University

Auditors risk costly litigation and loss of reputation when they are associated with clients that engage in substandard financial reporting, and prior research argues that accounting conservatism reduces managements‟ tendency to misreport. Thus, we predict that client conservatism affects auditor-cl...