In "Who Did the Audit? Audit Quality and Disclosures of Other Audit Participants in PCAOB Filings" (Dee, Lulseged and Zhang 2015), we examine quality for issuer audits disclosed as involving less-experienced "participating auditors". We find that market prices of these issuers reacted negatively at the time of disclosure, and investors' valuations of their post-disclosure quarterly earnings declined; investors have greater uncertainty in the numbers reported. In addition, the quality of the reported earnings is lower. However, we do not see a subsequent increase in audit fees which suggests clients don't increase demands for higher quality to counteract the uncertainty in investors' perceptions of audit quality. Since our sample is limited to less-experienced participating auditors, the results are not readily generalizable to the universe of participating auditors. We suggest research using Form AP data explore if our findings are generalizable to issuer audits involving the wider population of participating auditors.

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