Principles-based accounting standards and audit outcomes: empirical evidence

• Published in: Review of accounting studies Vol. 28; no. 1; pp. 164 - 200
• Main Authors: Cho, Myojung, Krishnan, Gopal V.
• Format: Journal Article
• Language: English
• Published: New York Springer US 01.03.2023; Springer Nature B.V
• Subjects: Accounting standards; Accounting/Auditing; Audit fees; Audit risk; Business and Management; Corporate Finance; Earnings management; Going concerns; Public Finance; M48; Audit report lag; Audit fees; M42; Principles-based standards; M41; Going concern; Audit risk

The purpose of this study is to empirically examine the relations between audit outcomes and accounting standard design (principles-based vs. rules-based) for US firms. Considering that audit outcomes may vary with audit risk, which may differ under different accounting standards, we examine and fin...