Kang Ho Cho

Date of Award


Degree Type


Degree Name

Doctor of Philosophy (PhD)


Business Administration


Susan Albring

Subject Categories

Accounting | Business


This dissertation research comprises two Chapters. Chapter One investigates the impact of macroeconomic uncertainty on audit quality. Chapter Two examines the incremental explanatory power of non-GAAP earnings for future GDP growth. In Chapter One of the thesis, the study explores whether macro-level uncertainty on the future economic prospects faced by all market participants referred to as macroeconomic uncertainty, affects audit quality. Previous literature finds a negative association between audit fees and macroeconomic uncertainty (e.g., Chen, Duh, Wu, and Yu 2019), which suggests a negative impact of macroeconomic uncertainty on audit quality. This research provides empirical evidence that, while macroeconomic uncertainty is generally associated with lower audit quality, auditors deploy greater audit effort, as measured by unexpected audit fees, which mitigates the negative association. In addition, the mitigation effect is more pronounced for clients who are audited by the Big 4 auditors and industry specialists, and clients operating in industries with higher litigation risk. These results remain robust when considering an alternative measure of macroeconomic uncertainty and audit quality and alternative samples. Overall, this study provides valuable insights into how auditors respond to macroeconomic uncertainty to uphold audit quality. Chapter Two explores the information content of aggregate non-GAAP earnings. The works of Konchitchki and Patatoukas (2014a,b) have documented that GAAP earnings growth has predictive power for future growth in nominal and real Gross Domestic Product (GDP). Expanding upon the macro accounting literature, this study examines whether non-GAAP earnings disclosed by managers provide additional informative content for predicting aggregate GAAP earnings. The findings indicate that aggregate non-GAAP earnings do not serve to provide a reliable forecast for future GDP growth. This lack of predictability can be attributed to the fact that the information conveyed by the non-GAAP earnings is already incorporated into the estimation process of GDP growth among macroeconomic forecasters. This study contributes to the existing body of research on the forecasting usefulness of accounting information at the aggregate level. Specifically, this study highlights the significance of the characteristics of voluntary disclosure playing a key role at the aggregate level by examining the role of non-GAAP earnings in the context of macroeconomic outcomes.


Open Access