Please use this identifier to cite or link to this item: https://hdl.handle.net/10356/103251
Title: The consequences of protecting audit partners’ personal assets from the threat of liability
Authors: Lennox, Clive S.
Li, Bing
Issue Date: 2012
Source: Lennox, C. S., & Li, B. (2012). The consequences of protecting audit partners’ personal assets from the threat of liability. Journal of Accounting and Economics, 54(2-3), 154-173.
Series/Report no.: Journal of accounting and economics
Abstract: This study investigates the audit firm’s decision to protect its partners’ personal assets by becoming a limited liability partnership (LLP). We find that the likelihood of an audit firm switching from unlimited to limited liability is increasing in its size and exposure to litigation risk. We find no evidence that audit firms supply lower audit quality, lose market share, or charge lower audit fees after they become LLPs. However, the mix of public and private clients in audit firms’ portfolios exhibits a significant shift toward riskier publicly traded companies after the switch to limited liability.
URI: https://hdl.handle.net/10356/103251
http://hdl.handle.net/10220/16890
ISSN: 0165-4101
DOI: http://dx.doi.org/10.1016/j.jacceco.2012.06.002
Fulltext Permission: none
Fulltext Availability: No Fulltext
Appears in Collections:NBS Journal Articles

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