Audit Quality Compromised as Auditors Compete for New Clients
This study explores how competition among auditors affects the quality of audits provided to clients. The research looks at how auditors might change their audit quality to attract new clients, sometimes lowering standards to appear more appealing. The findings suggest that when there is competition for new clients, auditors may compromise on audit quality in order to increase their chances of being hired. This study offers a new perspective on how auditors' desire to signal their reputation can influence their decisions.