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Spillover Effects Of Clients’ Tax Enforcement On Financial Statement Auditors: Evidence From A Discontinuity Design, Travis K. Chow, Jeffrey Pittman, Muzhi Wang, Le Zhao
Spillover Effects Of Clients’ Tax Enforcement On Financial Statement Auditors: Evidence From A Discontinuity Design, Travis K. Chow, Jeffrey Pittman, Muzhi Wang, Le Zhao
Research Collection School Of Accountancy
We examine the impact of clients’ tax enforcement on financial statement auditors. In a regression discontinuity design, we exploit the firm-registration-date-based application of a new rule that assigns firms to two different tax enforcement regimes. Our analysis implies that auditors exert less effort–evident in lower audit fees and shorter audit report lags–when their clients are monitored by the more stringent tax authority. In results supporting that audit quality improves in this situation despite the fall in auditor effort, we report that clients subject to tougher tax enforcement exhibit a lower incidence of accounting restatements and tax-related restatements. Additionally, we find …
Hedge Fund Ownership And Auditor-Client Contracting In U.S. Firms, Sarah Feltus
Hedge Fund Ownership And Auditor-Client Contracting In U.S. Firms, Sarah Feltus
PhD in Business Administration Dissertations
Hedge funds have grown rapidly in the last two decades, from managing assets worth approximately $600 billion in 2003 to over $3 trillion in 2017. As hedge funds themselves have grown, so too have concerns about their involvement with publicly traded companies and their effect on various stakeholders and the economy. Although Critics claim that hedge fund activism creates a short-term focus, shifting funds out of expansion and research and development and into distributions to shareholders, proponents argue that hedge fund activism helps boards overcome management incompetence and counter passive investors. Academic research is mixed on the long-term effects of …