Auditor style and financial statement comparability

Francis, JR; Pinnuck, ML; Watanabe, O

Auditor style and financial statement comparability

Francis, JR Pinnuck, ML Watanabe, O

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Publication Type:: Journal Article
Citation:: Accounting Review, 2014, 89 (2), pp. 605 - 633
Issue Date:: 2014-01-01

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Field	Value	Language
dc.contributor.author	Francis, JR	en_US
dc.contributor.author	Pinnuck, ML	en_US
dc.contributor.author	Watanabe, O	en_US
dc.date.issued	2014-01-01	en_US
dc.identifier.citation	Accounting Review, 2014, 89 (2), pp. 605 - 633	en_US
dc.identifier.issn	0001-4826	en_US
dc.identifier.uri	http://hdl.handle.net/10453/121944
dc.description.abstract	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.	en_US
dc.relation.ispartof	Accounting Review	en_US
dc.relation.isbasedon	10.2308/accr-50642	en_US
dc.subject.classification	Accounting	en_US
dc.title	Auditor style and financial statement comparability	en_US
dc.type	Journal Article
utslib.citation.volume	2	en_US
utslib.citation.volume	89	en_US
utslib.for	1501 Accounting, Auditing and Accountability	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Accounting Discipline
utslib.copyright.status	closed_access
pubs.issue	2	en_US
pubs.publication-status	Published	en_US
pubs.volume	89	en_US

Abstract:

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.

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/121944