Auditor Reputation Concerns, Legal Liability, and Standards
研究过失法律责任如何影响审计师在客户市场中的声誉激励，发现宽松准则下法律责任会削弱声誉激励、降低审计努力和盈余质量，而严格准则下则相反。
ABSTRACT This paper studies how legal liability due to negligence can weaken or strengthen an auditor's reputation concerns in the client market to provide high audit effort. A negligence liability rule relies on auditing standards to provide a threshold for the level of due care. When the negligence standard is lax, legal liability can weaken the auditor's reputation incentives, with lower audit effort than without legal liability. If the damage payment is low, noncompliance is less costly, because with compliance, reputational concerns cause the auditor to provide higher costly audit effort than the standard. In this case, investors also prefer noncompliance, and earnings quality is lower than if there were no legal liability damages. When the standard is stringent, noncompliance is less costly for the auditor, and legal liability strengthens reputation incentives. Investors may also prefer noncompliance, and earnings quality is higher than if there were no legal liability damages. JEL Classifications: M41; M42; D82; M48.