Evidence on the Association between Financial Restatements and Auditor Resignations

摘要: SYNOPSIS: Financial restatements have significant implications for auditor-client relationships. We estimate that a restatement increases the odds of an auditor resignation dramatically. Restatements involving fraud, reversing profit to loss, and those disclosed in press releases appear drive increased likelihood. Furthermore, companies with relatively severe are more likely hire smaller auditors following resignation. Collectively, these results consistent interpreting as indication client risk. Data Availability: The data used this study available from public sources identified text.