TY - JOUR
T1 - Demand for Audit Quality
T2 - The Case of Laventhol and Horwath’s Auditees
AU - Reed, Brad J.
AU - Trombley, Mark A.
AU - Dhaliwal, Dan S.
PY - 2000/4
Y1 - 2000/4
N2 - This study investigates the demand for audit quality for the firms being audited by Laventhol and Horwath (LH) at the time LH declared bankruptcy. The demand for audit quality by the former LH clients is inferred from their decisions to select Big Six or non–Big Six auditors. Because the change in auditors was involuntary, the sample avoids self-selection issues associated with voluntary auditor switches. LH clients that selected Big Six auditors tended to be more highly leveraged, have less management ownership, and issue more securities in the year after selecting the new auditor than LH clients that selected non–Big Six auditors.
AB - This study investigates the demand for audit quality for the firms being audited by Laventhol and Horwath (LH) at the time LH declared bankruptcy. The demand for audit quality by the former LH clients is inferred from their decisions to select Big Six or non–Big Six auditors. Because the change in auditors was involuntary, the sample avoids self-selection issues associated with voluntary auditor switches. LH clients that selected Big Six auditors tended to be more highly leveraged, have less management ownership, and issue more securities in the year after selecting the new auditor than LH clients that selected non–Big Six auditors.
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U2 - 10.1177/0148558X0001500205
DO - 10.1177/0148558X0001500205
M3 - Review article
AN - SCOPUS:84990341323
SN - 0148-558X
VL - 15
SP - 183
EP - 198
JO - Journal of Accounting, Auditing & Finance
JF - Journal of Accounting, Auditing & Finance
IS - 2
ER -