{"id":{"repo_id":"uiuc","oai_identifier":"oai:www.ideals.illinois.edu:2142/71389"},"canonical_url":"https://search.dev.ndltd.org/etd/uiuc/oai:www.ideals.illinois.edu:2142/71389","repository":{"repo_id":"uiuc","name":"University of Illinois - Urbana-Champaign","base_url":"https://www.ideals.illinois.edu/oai-pmh"},"display":{"title":"Firm Observability, Diversified Investors' Auditing Preferences, and the Nature, Timing and Extent of Auditors' Tests (An Empirical Analysis)","abstract":"This study develops an analytical and methodological framework to test whether external auditors' elections concerning the nature, timing and extent of their tests are consistent with the auditing preferences of fully diversified investors, where such preferences are conditioned on (and only on) the observability of the auditee's production and investing activities.","abstract_html":"This study develops an analytical and methodological framework to test whether external auditors' elections concerning the nature, timing and extent of their tests are consistent with the auditing preferences of fully diversified investors, where such preferences are conditioned on (and only on) the observability of the auditee's production and investing activities.","abstract_has_math":false,"creators":["Craig, Thomas Robert"],"institution":"University of Illinois at Urbana-Champaign","degree_name":"Ph.D.","degree_level":"Dissertation","degree_discipline":"Accountancy","degree_department":null,"school":null,"contributors":[],"advisors":[],"committee_chairs":[],"committee_members":[],"year":2014,"date_issued":"2014-12-16T06:41:14Z","date_published":"2014-12-16T06:41:14Z","updated_at":"2026-07-22T22:26:04Z","subjects":["Business Administration, Accounting"],"languages":[],"rights":[],"rights_urls":[],"identifier_entries":[{"key":"dc:identifier","label":"Identifier","values":["(UMI)AAI8502116"],"render_values":[{"text":"(UMI)AAI8502116","href":null,"code":true}]}]},"links":{"outbound_url":"http://hdl.handle.net/2142/71389","outbound_label":"Handle","outbound_source":"dc:identifier"},"metadata_groups":[{"id":"people","label":"People","entries":[{"key":"dc:creator","label":"Author","values":["Craig, Thomas Robert"]}]},{"id":"academic_context","label":"Academic Context","entries":[{"key":"dc:date","label":"Dc Date","values":["2014-12-16T06:41:14Z","10000-01-01","1984"]},{"key":"dc:type","label":"Dc Type","values":["text"]},{"key":"thesis:degree_discipline","label":"Discipline","values":["Accountancy"]},{"key":"thesis:degree_level","label":"Degree Level","values":["Dissertation"]},{"key":"thesis:degree_name","label":"Degree Name","values":["Ph.D."]},{"key":"thesis:institution_name","label":"Thesis Institution Name","values":["University of Illinois at Urbana-Champaign"]}]},{"id":"subjects_keywords","label":"Subjects and Keywords","entries":[{"key":"dc:subject","label":"Dc Subject","values":["Business Administration, Accounting"]}]},{"id":"identifiers","label":"Identifiers","entries":[{"key":"dc:identifier","label":"Identifier","values":["http://hdl.handle.net/2142/71389","(UMI)AAI8502116"]}]},{"id":"additional","label":"Additional Metadata","entries":[{"key":"dc:description","label":"Description","values":["This study develops an analytical and methodological framework to test whether external auditors' elections concerning the nature, timing and extent of their tests are consistent with the auditing preferences of fully diversified investors, where such preferences are conditioned on (and only on) the observability of the auditee's production and investing activities.","The study argues that firm observability is an important factor affecting financial statement distortion risk. This is because the increased likelihood of detection occasioned by increased firm observability acts as an important deterrent to managers who otherwise may bias financial statements. Also, it is argued that bias is the most important component of financial statement distortion risk from the standpoint of diversified investors, if only because the risk of unintentional distortions in financial statements can be eliminated through portfolio diversification.","The study's model development chapter deduces diversified investors' auditing preferences conditioned on firm observability, concluding that investors prefer that the year-end phase of auditors' examinations be more extensive as the observability of firms decreases. The research design chapter than develops a surrogate for relative firm observability (earnings estimation errors of skilled financial analysts), a surrogate for the relative extensiveness of the year-end phase of an auditor's examination (in general, the date of the auditor's report), and a research methodology to test whether auditors' overall nature, timing and extent elections are consistent with the auditing preferences of diversified investors. The empirical results of the study, which are based upon a random sample of 154 NYSE firms over a four-year period, lead to the conclusion that auditors' overall nature, timing and extent elections are consistent with the auditing preferences of diversified investors, where such preferences are conditioned on the observability of the firms examined.","Made available in DSpace on 2014-12-16T06:41:14Z (GMT). No. of bitstreams: 1 8502116.pdf: 3786145 bytes, checksum: 2f387c89bf2339d68d2d60b07f9b403f (MD5) Previous issue date: 1984","Embargo set by: Seth Robbins for item 71555 Lift date: Forever Reason: Restricted to the U of I community idenfinitely during batch ingest of legacy ETDs","Restricted to the U of I community idenfinitely during batch ingest of legacy ETDs","U of I Only","104 p.","Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 1984."]},{"key":"dc:title","label":"Title","values":["Firm Observability, Diversified Investors' Auditing Preferences, and the Nature, Timing and Extent of Auditors' Tests (An Empirical Analysis)"]}]}],"canonical_facts":{"dc:creator":["Craig, Thomas Robert"],"dc:date":["2014-12-16T06:41:14Z","10000-01-01","1984"],"dc:description":["This study develops an analytical and methodological framework to test whether external auditors' elections concerning the nature, timing and extent of their tests are consistent with the auditing preferences of fully diversified investors, where such preferences are conditioned on (and only on) the observability of the auditee's production and investing activities.","The study argues that firm observability is an important factor affecting financial statement distortion risk. This is because the increased likelihood of detection occasioned by increased firm observability acts as an important deterrent to managers who otherwise may bias financial statements. Also, it is argued that bias is the most important component of financial statement distortion risk from the standpoint of diversified investors, if only because the risk of unintentional distortions in financial statements can be eliminated through portfolio diversification.","The study's model development chapter deduces diversified investors' auditing preferences conditioned on firm observability, concluding that investors prefer that the year-end phase of auditors' examinations be more extensive as the observability of firms decreases. The research design chapter than develops a surrogate for relative firm observability (earnings estimation errors of skilled financial analysts), a surrogate for the relative extensiveness of the year-end phase of an auditor's examination (in general, the date of the auditor's report), and a research methodology to test whether auditors' overall nature, timing and extent elections are consistent with the auditing preferences of diversified investors. The empirical results of the study, which are based upon a random sample of 154 NYSE firms over a four-year period, lead to the conclusion that auditors' overall nature, timing and extent elections are consistent with the auditing preferences of diversified investors, where such preferences are conditioned on the observability of the firms examined.","Made available in DSpace on 2014-12-16T06:41:14Z (GMT). No. of bitstreams: 1 8502116.pdf: 3786145 bytes, checksum: 2f387c89bf2339d68d2d60b07f9b403f (MD5) Previous issue date: 1984","Embargo set by: Seth Robbins for item 71555 Lift date: Forever Reason: Restricted to the U of I community idenfinitely during batch ingest of legacy ETDs","Restricted to the U of I community idenfinitely during batch ingest of legacy ETDs","U of I Only","104 p.","Thesis (Ph.D.)--University of Illinois at Urbana-Champaign, 1984."],"dc:identifier":["http://hdl.handle.net/2142/71389","(UMI)AAI8502116"],"dc:subject":["Business Administration, Accounting"],"dc:title":["Firm Observability, Diversified Investors' Auditing Preferences, and the Nature, Timing and Extent of Auditors' Tests (An Empirical Analysis)"],"dc:type":["text"],"thesis:degree_discipline":["Accountancy"],"thesis:degree_level":["Dissertation"],"thesis:degree_name":["Ph.D."],"thesis:institution_name":["University of Illinois at Urbana-Champaign"]},"updated_at":"2026-07-22T22:26:04Z"}