Do Auditors View Off-the-Clock Misbehavior by Company Leadership as a Signal of Tone at the Top?
研究审计师如何应对公司高管和董事的非工作时间不当行为指控，发现审计师会提高收费或辞职，且反应强度取决于指控性质、审计办公室经验及客户经济重要性。
ABSTRACT We study off-the-clock indiscretion accusations against corporate officers and directors and examine the extent, effectiveness, and context of auditors’ response. In the year that indiscretion allegations are first publicized, auditors charge higher fees and are more likely to resign. Auditors respond to allegations against both top executives and board members. Further, reactions are strongest when allegations demonstrate a lack of individual integrity and, separately, when the audit office has previously audited other similarly accused clients. Importantly, the resulting increase in auditors’ effort partially negates the association between indiscretions and lower financial reporting quality. However, auditors are primarily reactive, rather than proactive, and their response is stronger when the accused client is less important economically. These results suggest that company leadership’s off-the-clock indiscretions are signals to auditors of poor tone at the top, but the audit response is not uniform across all clients. JEL Classifications: M41; M42; M48; G34.