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Audit Office Closure Risk and Audit Outcomes

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dc.contributor.authorDiYorio, Jonathan Gabrielen
dc.contributor.committeechairAcito, Andrew A.en
dc.contributor.committeechairTan, Liangen
dc.contributor.committeememberStein, Sarah E.en
dc.contributor.committeememberDavidson, Robert H.en
dc.contributor.departmentBusiness, Accounting and Information Systemsen
dc.date.accessioned2023-05-02T08:00:13Zen
dc.date.available2023-05-02T08:00:13Zen
dc.date.issued2023-05-01en
dc.description.abstractThis study aims to better understand factors associated with audit office closures and how the risk of office closure relates to audit outcomes, including audit quality and fees. Factors associated with office closure include small office size, lower office growth, proximity to regulators, unfavorable local economic changes, client losses, and lack of recent local office closures. The main analysis does not find evidence of a relationship between closure risk and audit quality but suggests that offices with a higher closure risk charge higher audit fees per client compared to offices with lower closure risk. Results also suggest that clients who change audit firms following closure of their auditor's office enjoy higher quality and lower fees compared to those clients who change offices but remain with the same firm following closure. These audit quality results cannot be explained by clients switching to Big 4 auditors, industry specialists, or to more geographically proximate offices. Instead, these results suggest a fresh look benefit by the new audit firm. Additionally, the audit fee discount enjoyed by these clients diminishes over time as the fees for these clients increase more quickly than for those clients that change offices following closure.en
dc.description.abstractgeneralThis study aims to better understand factors associated with audit firm office closures and how the risk of closure for non-closed offices relates to audit outcomes, including audit quality and fees. Factors associated with office closure include small office size, lower office growth, proximity to regulators, unfavorable local economic changes, client losses, and lack of recent local office closures. The main analysis does not find evidence of a relationship between closure risk and audit quality but suggests that offices with a higher closure risk charge higher audit fees per client compared to offices with lower closure risk. Results also suggest that clients who change audit firms following closure of their auditor's office enjoy higher quality and lower fees compared to those clients who change offices but remain with the same firm following closure.en
dc.description.degreeDoctor of Philosophyen
dc.format.mediumETDen
dc.identifier.othervt_gsexam:37137en
dc.identifier.urihttp://hdl.handle.net/10919/114875en
dc.language.isoenen
dc.publisherVirginia Techen
dc.rightsIn Copyrighten
dc.rights.urihttp://rightsstatements.org/vocab/InC/1.0/en
dc.subjectaudit officesen
dc.subjectoffice closureen
dc.subjectaudit qualityen
dc.titleAudit Office Closure Risk and Audit Outcomesen
dc.typeDissertationen
thesis.degree.disciplineBusiness, Accounting and Information Systemsen
thesis.degree.grantorVirginia Polytechnic Institute and State Universityen
thesis.degree.leveldoctoralen
thesis.degree.nameDoctor of Philosophyen

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