Please use this identifier to cite or link to this item: https://hdl.handle.net/10356/139474
Title: When assuming less responsibility backfires : the effects of audit responsibility assignment, audit failure location, and engagement partner signature on auditor legal liability
Authors: Cao, Tongrui
Keywords: Business::Auditing::Standards
Issue Date: 2020
Publisher: Nanyang Technological University
Source: Cao, T. (2020). When assuming less responsibility backfires : the effects of audit responsibility assignment, audit failure location, and engagement partner signature on auditor legal liability. Doctoral thesis, Nanyang Technological University, Singapore.
Abstract: This thesis examines the effects of audit responsibility assignment (divide versus assume), audit failure location (lead versus participating audit firm), and engagement partner signature (present versus absent) on jurors’ evaluations of auditor legal liability. The PCAOB recently proposed two auditing standards amendments regarding how the lead audit firm assigns audit responsibility in group audits, and whether the engagement partner of the lead audit firm signs the group audit report in his/her personal name. This thesis finds that relative to assuming full audit responsibility for the entire audit engagement, dividing audit responsibility with the participating audit firm reduces the lead audit firm liability when the audit failure is found in the audit area of the participating audit firm. Dividing audit responsibility thus appears beneficial for the lead audit firm but actually comes with costs: it increases the lead audit firm liability when the audit failure is found in the audit area of the lead audit firm. Further, this thesis finds that an engagement partner signature generally reduces jurors’ negligence verdicts because signing an audit report with the engagement partner’s name increases jurors’ assessments of auditor credibility.
URI: https://hdl.handle.net/10356/139474
DOI: 10.32657/10356/139474
Rights: This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License (CC BY-NC 4.0).
Fulltext Permission: open
Fulltext Availability: With Fulltext
Appears in Collections:NBS Theses

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