“Contrary to the conventional wisdom, we find that the client tends to spend fewer corporate resources on precision with audit risk disclosure. As a result of lower precision, audit risk disclosure may lower the informativeness of audited financial reports, albeit ex-post communicating more information to the market. We also find that audit risk disclosure reduces the client’s ex-ante payoff when the auditor bears a high misstatement cost due to audit failure.”
The Role of Audit Risk Disclosure in Financial Reporting Precision and the Quality of Audited Financial Reports
S’abonner
0 Commentaires