Date of Graduation


Document Type


Degree Name

Doctor of Philosophy in Business Administration (PhD)

Degree Level





Cory Cassell and Jonathan Shipman

Committee Member

Gary Peters


Auditing, Information spillovers, Operating performance, Confidentiality, Proprietary information, Informational capital


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.

Available for download on Friday, June 24, 2022