{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2026,1,13]],"date-time":"2026-01-13T12:43:27Z","timestamp":1768308207686,"version":"3.49.0"},"reference-count":59,"publisher":"American Accounting Association","issue":"2","content-domain":{"domain":[],"crossmark-restriction":false},"short-container-title":[],"published-print":{"date-parts":[[2024,7,1]]},"abstract":"<jats:title>ABSTRACT<\/jats:title>\n               <jats:p>This study constructs a measure of audit quality that captures the effect of potential factors that are generally unobservable to people outside of the audit firm or client company. Using machine learning and a wide range of data describing audit firm characteristics, audit partners, and public companies in China, this paper constructs the \u201csurprise score,\u201d a new measure of audit quality, calculated as the difference between the predicted probability and the actual value of an audit quality-related event (i.e., the existence of material misstatements, audit adjustments, and nonclean audit opinions). The effectiveness of the surprise score is validated by testing the association between the surprise score and penalties or audit firm changes. The proposed approach is applied to U.S. data to generalize its application. The surprise score adds value to existing audit quality measures and can help regulators to make better-informed decisions about audit quality.<\/jats:p>\n               <jats:p>Data Availability: Except for the data privately provided by CICPA and MFC, other datasets are available from the public sources cited in the text.<\/jats:p>\n               <jats:p>JEL Classifications: M41; M42.<\/jats:p>","DOI":"10.2308\/isys-2023-027","type":"journal-article","created":{"date-parts":[[2024,5,16]],"date-time":"2024-05-16T18:36:15Z","timestamp":1715884575000},"page":"51-78","source":"Crossref","is-referenced-by-count":2,"title":["Measuring Audit Quality with Surprise Scores: Evidence from China and the U.S."],"prefix":"10.2308","volume":"38","author":[{"given":"Hanxin","family":"Hu","sequence":"first","affiliation":[{"name":"Kean University"}]},{"given":"Ting","family":"Sun","sequence":"additional","affiliation":[{"name":"The College of New Jersey"}]},{"ORCID":"https:\/\/orcid.org\/0000-0003-3205-476X","authenticated-orcid":false,"given":"Miklos A.","family":"Vasarhelyi","sequence":"additional","affiliation":[{"name":"Rutgers, The State University of New Jersey, Newark"}]},{"given":"Min","family":"Zhang","sequence":"additional","affiliation":[{"name":"Renmin University of China"}]}],"member":"1112","published-online":{"date-parts":[[2024,6,14]]},"reference":[{"issue":"1","key":"2024070218515109100_B1","doi-asserted-by":"crossref","first-page":"144","DOI":"10.1016\/j.jacceco.2018.09.001","article-title":"Do practitioner assessments agree with academic proxies for audit quality? Evidence from PCAOB and internal inspections","volume":"67","author":"Aobdia,","year":"2019","journal-title":"Journal of Accounting and Economics"},{"key":"2024070218515109100_B2","doi-asserted-by":"crossref","unstructured":"Bajaj,\n              M.\n            , K.Gunny, and A.Sarin. 2003. Auditor compensation and audit failure: An empirical analysis. 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Random forests. Machine Learning45 (1): 5\u201332. https:\/\/doi.org\/10.1023\/A:1010933404324","DOI":"10.1023\/A:1010933404324"},{"issue":"3","key":"2024070218515109100_B6","doi-asserted-by":"crossref","first-page":"653","DOI":"10.2308\/accr.2006.81.3.653","article-title":"Audit partner tenure and audit quality","volume":"81","author":"Carey,","year":"2006","journal-title":"The Accounting Review"},{"issue":"7","key":"2024070218515109100_B7","doi-asserted-by":"crossref","first-page":"1146","DOI":"10.1287\/mnsc.1100.1174","article-title":"Detecting management fraud in public companies","volume":"56","author":"Cecchini,","year":"2010","journal-title":"Management Science"},{"issue":"2","key":"2024070218515109100_B8","doi-asserted-by":"crossref","first-page":"227","DOI":"10.2308\/aud.2009.28.2.227","article-title":"Forced audit firm change, continued partner-client relationship, and financial reporting quality","volume":"28","author":"Chen,","year":"2009","journal-title":"Auditing: A Journal of Practice & Theory"},{"issue":"4","key":"2024070218515109100_B9","doi-asserted-by":"crossref","first-page":"1083","DOI":"10.1007\/s10551-016-3366-5","article-title":"Social trust and auditor reporting conservatism","volume":"153","author":"Chen,","year":"2018","journal-title":"Journal of Business Ethics"},{"issue":"3","key":"2024070218515109100_B10","doi-asserted-by":"crossref","first-page":"892","DOI":"10.1111\/j.1911-3846.2011.01088.x","article-title":"Effects of audit quality on earnings management and cost of equity capital: Evidence from China","volume":"28","author":"Chen,","year":"2011","journal-title":"Contemporary Accounting Research"},{"issue":"1","key":"2024070218515109100_B11","doi-asserted-by":"crossref","first-page":"127","DOI":"10.2308\/accr.2010.85.1.127","article-title":"Client importance, institutional improvements, and audit quality in China: An office and individual auditor level analysis","volume":"85","author":"Chen,","year":"2010","journal-title":"The Accounting Review"},{"issue":"5","key":"2024070218515109100_B12","doi-asserted-by":"crossref","first-page":"1813","DOI":"10.1111\/1475-679X.12453","article-title":"The costs of waiving audit adjustments","volume":"60","author":"Choudhary,","year":"2022","journal-title":"Journal of Accounting Research"},{"key":"2024070218515109100_B13","volume-title":"The Audit Quality Framework","author":"Council,","year":"2008"},{"issue":"3","key":"2024070218515109100_B14","doi-asserted-by":"crossref","first-page":"183","DOI":"10.1016\/0165-4101(81)90002-1","article-title":"Auditor size and audit quality","volume":"3","author":"DeAngelo,","year":"1981","journal-title":"Journal of Accounting and Economics"},{"issue":"2\u20133","key":"2024070218515109100_B15","doi-asserted-by":"crossref","first-page":"344","DOI":"10.1016\/j.jacceco.2010.09.001","article-title":"Understanding earnings quality: A review of the proxies, their determinants and their consequences","volume":"50","author":"Dechow,","year":"2010","journal-title":"Journal of Accounting and Economics"},{"issue":"1","key":"2024070218515109100_B16","doi-asserted-by":"crossref","first-page":"17","DOI":"10.1111\/j.1911-3846.2010.01041.x","article-title":"Predicting material accounting misstatements","volume":"28","author":"Dechow,","year":"2011","journal-title":"Contemporary Accounting Research"},{"issue":"2\u20133","key":"2024070218515109100_B18","doi-asserted-by":"crossref","first-page":"275","DOI":"10.1016\/j.jacceco.2014.09.002","article-title":"A review of archival auditing research","volume":"58","author":"DeFond,","year":"2014","journal-title":"Journal of Accounting and Economics"},{"issue":"3","key":"2024070218515109100_B19","doi-asserted-by":"crossref","first-page":"269","DOI":"10.1016\/S0165-4101(00)00005-7","article-title":"The impact of improved auditor independence on audit market concentration in China","volume":"28","author":"DeFond,","year":"1999","journal-title":"Journal of Accounting and Economics"},{"issue":"4","key":"2024070218515109100_B20","doi-asserted-by":"crossref","first-page":"193","DOI":"10.2308\/ajpt-10301","article-title":"Audit firm governance: Do transparency reports reveal audit quality?","volume":"31","author":"Deumes,","year":"2012","journal-title":"Auditing: A Journal of Practice & Theory"},{"issue":"2","key":"2024070218515109100_B21","doi-asserted-by":"crossref","first-page":"89","DOI":"10.2308\/accr-52556","article-title":"Managing the auditor-client relationship through partner rotations: The experiences of audit firm partners","volume":"95","author":"Dodgson,","year":"2020","journal-title":"The Accounting Review"},{"issue":"3","key":"2024070218515109100_B22","doi-asserted-by":"crossref","first-page":"849","DOI":"10.1007\/s10551-017-3762-5","article-title":"What\u2019s in a surname? The effect of auditor-CEO surname sharing on financial misstatement","volume":"158","author":"Du,","year":"2019","journal-title":"Journal of Business Ethics"},{"issue":"4","key":"2024070218515109100_B23","doi-asserted-by":"crossref","first-page":"279","DOI":"10.1016\/j.cjar.2018.06.001","article-title":"Auditor human capital and financial misstatement: Evidence from China","volume":"11","author":"Du,","year":"2018","journal-title":"China Journal of Accounting Research"},{"issue":"1","key":"2024070218515109100_B24","doi-asserted-by":"crossref","first-page":"109","DOI":"10.1016\/j.intacc.2011.12.006","article-title":"How do various forms of auditor rotation affect audit quality? 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A.Vasarhelyi, and M.Zhang. 2023. Audit adjustments matter: How does the disclosure of audit adjustments help improving audit quality? 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N.\n            , L. A.Myers, Z.-V.Palmrose, and S.Scholz. 2004. Mandatory auditor rotation: Evidence from restatements. 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