Lu, Tong2020-01-07May 20192019-05May 2019https://hdl.handle.net/10657/5815This study investigates the effects of tightening auditing standards in a setting of an oligopolistic audit market and a competitive capital market. I look at how tightening auditing standards affects audit quality, audit fee, audit market share, stock price, and investment decisions. Two audit firms engage in a two-stage competition: audit quality competition and audit fee competition. Audit quality has a dual role: (a) audit quality affects the credibility of the accounting reports (precision effect); (b) a company’s choice of a high-quality versus a low-quality audit firm signals its hidden information about its economic prospects (signaling effect). I find that tightening auditing standards will improve the credibility of accounting reports of those companies that stick to original auditors and impair the credibility of accounting reports of those companies that switch auditors.application/pdfengThe author of this work is the copyright owner. UH Libraries and the Texas Digital Library have their permission to store and provide access to this work. Further transmission, reproduction, or presentation of this work is prohibited except with permission of the author(s).Auditing standardsAudit feeAudit qualityCapital marketsDoes Tightening Auditing Standards Improve or Impair Welfare?2020-01-07Thesisborn digital