On Controlling for Misstatement Risk
研究发现，用前期错报控制当期错报风险会显著偏误系数估计，这种偏误在审计费用、内控缺陷和审计师变更中均存在，并讨论了替代控制方法。
SUMMARY Ex ante misstatement risk confounds most settings relying on misstatements as a measure of audit quality, but researchers continue to debate how to effectively control for this construct. In this study, we consider a recent approach that involves controlling for prior period misstatements (“Lagged Misstatements”). Using a controlled simulation and a basic archival analysis, we show that a lagged misstatement control can significantly bias coefficient estimates. We demonstrate this bias using audit fees as a variable of interest but also show the same issue manifests for other measures that respond to the restatement of misstated financial statements (i.e., internal control material weaknesses and auditor changes). We conclude by discussing alternative approaches for controlling for ex ante misstatement risk and providing guidance for future research. Data Availability: All data used are publicly available from sources cited in the text. JEL Classifications: M40; M41; M42.