Proprietary Information Spillovers and Auditor Choice

@inproceedings{Aobdia2011ProprietaryIS,
  title={Proprietary Information Spillovers and Auditor Choice},
  author={Daniel Aobdia and Arthur Andersen},
  year={2011}
}
Using exogenous shocks to the auditing industry, including large auditor mergers and the collapse of Arthur Andersen, I document a reluctance of rivals to engage the same auditor due to information spillover concerns. This reluctance is more evident in concentrated industries where barriers to mobility, proxied by differentiation and capital expenditure levels, are low. More secretive manufacturing firms are also more reluctant to share their auditor with a rival. I also find weak evidence that… CONTINUE READING

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