The Riskiness of Large Audit Firm Client Portfolios and Changes in Audit Liability Regimes: Evidence from the U.S. Audit Market

摘要: We investigate whether the financial riskiness of large US audit firm clienteles varied with changing litigation liability environment during period 1975-1999. Partitioning study into four distinct periods [a benchmark (1975-1984), a increasing concerns about (1985-1989), lobbying for reform (1990-1994) and post-relief (1995-1999)], we find some evidence risk decreases 1985-1989, strong 1990-1994 increases 1995-1999. However, also that over our study, time which Big Six market shares grew appreciably, proportion litigious-industry clients in client portfolios at same rate as such population. Moreover, share financially riskiest economy did not grow fast overall share. In sum, while is consistent hypothesis responded to changes environment, no systematic race bottom or fishing by these firms bid increase their shares.