PUBLIC ACCOUNTING FIRMS: Required Study on the Potential Effects of Mandatory Audit Firm Rotation

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PUBLIC ACCOUNTING FIRMS: Required Study on the Potential Effects of Mandatory Audit Firm Rotation

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Each household member records spending for the same two diary weeks, so we must pool observations across households to study expenditures over an entire month. Given that distance from payday is orthogonal to household characteristics, this pooling should not bias our estimate of the relationship between distance and spending.8 We impose a number of sample restrictions. People paid weekly are excluded, because every diary week includes a payday for these individuals.9 If there is more than one paycheck received by the household, on different paydays, this would tend to obscure the relationship of interest, so we drop households where there is any secondary earner whose paycheck is greater...

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