Essays on the audit market for banks

This dissertation contains two essays in the field of accounting. Both essays address issues in the audit market for banking firms. The first essay investigates going concern opinion issuance among banks. We develop and test a model of determinants of auditors' going concern report issuance to banks. We find that that regulatory concern is a significant determinant of going concern opinions, as are low capitalization levels and poor quality loan portfolios. However, liquidity issues do not appear to be associated with going concern reporting frequencies. Our investigation adds to the going concern literature by identifying determinants of going concern reporting in this unique industry and providing evidence on how it was affected by the financial crisis. Additionally, we shed light on the audit market for the banking industry, which is generally excluded from the audit literature. In the second essay, I investigate the audit market for banks as well as auditor switching among banks. I develop an industry specific auditor switch model for banks. I incorporate standard switch determinants from prior switch literature as well as risk measures that are unique to banks into the model. This original model is used within the setting of the financial crisis to analyze the effects of the crisis on auditor switching among banks. I find that resignations decreased significantly during the actual crisis years. Following the crisis, resignations increased significantly while dismissals decreased significantly. Additionally, bank risk factors affect dismissals and resignations differently among the different time periods. My analysis adds to the existing auditor switch literature by identifying determinants of switching in this unique industry and providing evidence on how it was affected by the financial crisis. Finally, both studies offer insights on the audit market for the banking industry, which is generally excluded from the audit literature.