Auditor Benchmarking of Client Disclosures

Review of Accounting Studies, Forthcoming

Posted: 25 Jan 2019

See all articles by Michael S. Drake

Michael S. Drake

Brigham Young University - Marriott School

Phillip T. Lamoreaux

Arizona State University

Phillip J. Quinn

University of Washington Foster School of Business

Jacob R. Thornock

Brigham Young University

Multiple version iconThere are 2 versions of this paper

Date Written: December 1, 2018


We examine auditors’ disclosure benchmarking, which we define as auditors’ acquisition of non-client financial statement information for the purpose of evaluating a client’s financial statement information. Employing a novel dataset that captures auditors’ access of nonclient annual and quarterly SEC filings on EDGAR, we predict and find that auditors engage in disclosure benchmarking when auditing clients faced with higher levels of reporting complexity, financial reporting risk, and litigation risk. Lastly, we predict that auditors incorporate the information they obtain via disclosure benchmarking into their audit. Consistent with our prediction, disclosure benchmarking is positively associated with a client’s financial statement disaggregation, and client footnotes exhibit greater comparability to targeted non-clients’ footnotes after disclosure benchmarking. Overall, this study offers an empirical look into the “black box” of the audit process by examining auditor benchmarking and its effects on client financial reports.

Keywords: disclosure benchmarking, audit process, information acquisition, client financial reporting, EDGAR filings

JEL Classification: K22, M41, M49

Suggested Citation

Drake, Michael S. and Lamoreaux, Phillip T. and Quinn, Phillip J. and Thornock, Jacob, Auditor Benchmarking of Client Disclosures (December 1, 2018). Review of Accounting Studies, Forthcoming, Available at SSRN:

Michael S. Drake

Brigham Young University - Marriott School ( email )

United States

Phillip T. Lamoreaux (Contact Author)

Arizona State University ( email )

Tempe, AZ 85287
United States

Phillip J. Quinn

University of Washington Foster School of Business ( email )

224 Mackenzie Hall, Box 353200
Seattle, WA 98195-3200
United States

Jacob Thornock

Brigham Young University ( email )

Provo, UT 84602
United States
8014220828 (Phone)

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics