Electronic Theses and Dissertations

Yaqing Zhang

Date

2025

Document Type

Dissertation

Degree Name

Doctor of Philosophy

Department

Accounting

Committee Chair

Joanna Golden

Committee Chair

Joseph Zhang

Committee Member

Huigang Liang

Committee Member

James Lukawitz

Committee Member

Philip Kunz

Abstract

Three essays are included in this dissertation. In the first one, I investigate whether auditors show their leniency to companies during the COVID-19 pandemic by examining their reporting of going concern opinions (GCOs). The pandemic triggers significant global economic and financial uncertainty. Auditors are responsible for evaluating whether a company can sustain its operations in the foreseeable future as a going concern, particularly during challenging situations. Using a sample of 10,548 firm-year observations, ranging from 2017 to 2022, this study tests the association between GCO and the pandemic period. The results indicate a notable decrease in GCO issuance after the pandemic, meaning that auditors are lenient in the post-pandemic period. Additional analysis reveals that this effects is more significant in government-supported industries. Our main results are also supported by several robust tests. This study enhances the understanding of auditors’ behavior during crisis conditions, and the impacts of governmental support on audit practices. Essay 2 explores the impact of shared audit firms on the textual characteristics of critical audit matters (CAMs), especially similarity and readability. This research examines 1,486 CAM disclosure reports from 9,405 company-year peer pairs, analyzing CAM similarity by cosine similarity metrics and measuring readability with the Gunning Fog Index. The data show that firms under the common audit firms experience a 3% increase in CAM similarity, but there are no significant differences in CAM readability. Additional analysis shows that the audit firms’ responses components of the CAM are more similar and easier to read compared to the CAM descriptions components. These findings provide valuable insights in understanding auditors’ behavior and how they affect the comparability and readability of audit reports, helping stakeholders make informed decisions. Essay 3 examines auditors’ response to ASC 606, especially audit report lag, audit fees, and audit independence. Based on the flexible nature of ASC 606, auditors must exercise greater professional judgment in the evaluation process. Findings show that audit report lag increases, audit fees rise, and more efforts are involved after the implementation of ASC 606. Considering whether auditors adjust their professional judgment process depending on potential earnings management behavior under the new standard, this research also applies earnings management as a moderating factor to verify the main results. This study enhances the understanding of auditors’ behavior and the audit outcomes in response to a new standard implementation, especially the introduction of ASC 606.

Comments

Data is provided by the student.

Library Comment

Dissertation or thesis originally submitted to ProQuest.

Notes

Open access

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