Auditors' Responses to Classification Shifting: Evidence from U.S. Firms
研究了审计师如何应对客户在利润表中故意错分项目的行为（分类转移），发现分类转移与审计费用增加、审计报告延迟、出具非标意见及审计师辞职正相关，且分类转移会增加未来财务重述的可能性。
SYNOPSIS This study examines how auditors react to clients' engagement in classification shifting which refers to the intentional misallocation of line items within the income statement. We find that classification shifting is positively associated with audit fees, audit report lags, the issuance of a modified audit opinion, and auditor resignations. Additional analyses show that auditors' responses to multiple-year classification shifting are similar to our main findings. We further find that classification shifting is associated with a higher likelihood of financial misstatements in the classification shifting year, and future announcements of financial restatements. We also find that the probability of future restatements is even higher when audit clients engage in both classification shifting and real earnings management. Overall, our results imply that auditors become more cautious in response to audit clients' classification shifting behavior. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: M40; M41; M42.