Abstract

http://ssrn.com/abstract=1982234
 


 



Asleep At The Wheel (Again)? Bank Audits During The Lead-up To The Financial Crisis


Rajib Doogar


University of Washington, Bothell

Stephen P. Rowe


Tulane University

Padmakumar Sivadasan


Tulane University

August 6, 2013

Contemporary Accounting Research, Forthcoming

Abstract:     
We present the first large-sample empirical evidence on U.S. auditors’ responses to changes in entity-level audit risk during 2006-2007, the period leading-up to the financial crisis of 2008-2009. Treating fiscal year 2005 engagements as a pre-crisis benchmark, we find that audit attention during fiscal year 2006 and 2007 bank audit engagements shifted in line with the shifting audit risks. One implication of these findings is that auditors were able to recognize and respond to financial statement impacts of the macroeconomic shocks that unfolded during the lead-up to the crisis. Another implication is that auditors’ failure to issue advance warnings of increasing auditee riskiness during the time leading up to the financial crisis more likely reflects limitations of extantaccounting and auditing rules rather than a lack of auditor awareness or attention to those risks.

Number of Pages in PDF File: 52

Keywords: Auditor risk responsiveness, banks, business risk, financial crisis, macroeconomic shocks

JEL Classification: D20, D24, E44, G21, L11, L15, M40, M41, M49

Accepted Paper Series


Download This Paper

Date posted: January 10, 2012 ; Last revised: August 8, 2013

Suggested Citation

Doogar, Rajib and Rowe, Stephen P. and Sivadasan, Padmakumar, Asleep At The Wheel (Again)? Bank Audits During The Lead-up To The Financial Crisis (August 6, 2013). Contemporary Accounting Research, Forthcoming. Available at SSRN: http://ssrn.com/abstract=1982234 or http://dx.doi.org/10.2139/ssrn.1982234

Contact Information

Rajib Doogar (Contact Author)
University of Washington, Bothell ( email )
18115 Campus Way NE
Bothell, WA 98011-8246
United States
Stephen P. Rowe
Tulane University ( email )
United States
2179791489 (Phone)
HOME PAGE: http://scrowe.net
Padmakumar Sivadasan
Tulane University ( email )
7 McAlister Drive
New Orleans, LA 70118
United States
5048655208 (Phone)
Feedback to SSRN


Paper statistics
Abstract Views: 1,120
Downloads: 330
Download Rank: 50,753

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo7 in 0.407 seconds