Litigation Risk and Audit Firm Characteristics
利用一家大型保险公司的数据，研究了审计事务所的规模、增长、起诉客户历史等问题特征与诉讼风险的关系，发现这些特征会增加风险，但独立性和专业能力与风险无关。
SUMMARY: This study examines the association between certain audit firm characteristics and audit firm litigation risk. Previous research shows a link between audit client characteristics and audit firm litigation risk. However, insurance companies do not make extensive use of financial information about individual audit clients to make risk assessments. Instead, they primarily use information about the audit firms themselves. Using data from a large insurance company, we examine the link between several audit firm characteristics and audit-related litigation. Based on a dichotomous measure of risk (existence of a lawsuit), we find that larger firms, firms experiencing rapid growth, firms that sue their clients, and firms with a history of problems all face greater litigation risk. Introducing a continuous measure of the cost of litigation we find, in addition to the previously mentioned risk factors, that firms with a prior history of regulatory problems and firms that choose smaller deductibles are more risky to the insurance company. However, our proxies for independence and expertise are not associated with litigation risk.