Topic: Do Auditors Learn from Their Clients’ Stock Prices? Evidence from Audit Adjustments of Pre-audited Earnings

Speaker: Mei FENG

Date & Time: 14:00-15:30  26 June, 2026

Venue: Room 246, Quanxue Building

Organizers: School of Accounting, Dongbei University of Finance and Economics; Liaoning Province Capital Market Finance and Accounting Graduate Innovation and Academic Exchange Center

Abstract：This study investigates whether auditors learn from their clients’ stock prices when auditing financial statements. We find a significant positive association between audit adjustments and the misalignment between clients’ annual stock returns and pre-audited earnings, especially when stock returns are lower relative to pre-audited earnings. This effect is stronger for clients whose stock prices contain greater private information from traders. Incorporating stock price information into audit adjustments improves audit quality, particularly when prices reflect more private information from traders. Overall, our evidence indicates that auditors learn from their clients’ stock prices, and such learning enhances audit quality.

Introduction of Speaker: Feng MEI is a Professor at the University of Pittsburgh, USA. Her research interests encompass management earnings forecasts, analyst earnings forecasts, accounting misstatements, and internal control over financial reporting. She has published multiple papers in leading international journals, including The Accounting Review, Journal of Accounting and Economics, Journal of Accounting Research, Contemporary Accounting Research, and Review of Accounting Studies.