Date of Graduation
7-2020
Document Type
Dissertation
Degree Name
Doctor of Philosophy in Business Administration (PhD)
Degree Level
Graduate
Department
Accounting
Advisor/Mentor
Cory Cassell and Jonathan Shipman
Committee Member
Gary Peters
Keywords
Auditing, Information spillovers, Operating performance, Confidentiality, Proprietary information, Informational capital
Abstract
In this study, I examine whether companies realize operational benefits from making “targeted auditor switches” (i.e., engaging a new auditor recently dismissed by a competitor company). While prior work provides evidence consistent with companies perceiving that auditor information spillovers are costly, there is sparse extant evidence as to whether auditors actually do transfer operational information across companies. I find that companies that switch to a competitor’s former auditor realize significant subsequent improvements in operating performance, and I provide evidence that the association between targeted auditor switches and improvements in operating performance varies predictably with several across- and within-market factors. In addition, I find that the operational improvements associated with targeted switches are driven by reductions in operating expenditures as opposed to increases in revenues. Collectively, my findings suggest that operational information can be transferred across companies via external auditors and that companies’ concerns over sharing an auditor with a competitor are based on real information spillover costs.
Citation
Kleppe, T. (2020). Auditor Information Spillovers and Company Operating Performance: Evidence from Targeted Auditor Switches. Graduate Theses and Dissertations Retrieved from https://scholarworks.uark.edu/etd/3721
Included in
Accounting Commons, Business Administration, Management, and Operations Commons, Business Analytics Commons, Corporate Finance Commons, Finance and Financial Management Commons, Organizational Behavior and Theory Commons