The Effects of the Auditor's Insurance Role on Reporting Conservatism and Audit Quality
研究了审计师的保险角色如何影响审计质量和报告稳健性，发现当投资外生时保险角色增强会提升审计质量和稳健性，但投资内生时则相反。
ABSTRACT We examine the effects of the auditor's insurance role on audit quality and reporting conservatism. The investor pays for the auditor's penalty through the audit fees and expects to collect a portion of it—when the investor recovers the entire expected penalty, the insurance role is perfect. When the investment is exogenous, consistent with Watts' (2003a, 2003b) argument, we find that an increase in the auditor's insurance role improves audit quality and conservatism, because conservatism helps to reduce the auditor's legal liability. However, when the investment level is endogenous, we find that the investment level and conservatism decrease with increases in the auditor's insurance role, because conservatism helps to mitigate the deadweight loss of the legal liability cost.