“…For example, Balsam, Krishnan, and Yang (2003) and Krishnan (2003) early find that the auditor with industry expertise mitigates discretionary accruals and, consequently, improves the quality of financial reports. Recent research confirms this result (e.g., Chi & Chin, 2011; Garven, Beck, & Parsons, 2017; Liu, Xie, Chang, & Forgione, 2017; Reichelt & Wang, 2010). However, Chi, Lisic, and Pevzner (2011) and Burnett, Cripe, Martin, and McAllister (2012) report that industry expertise is associated with higher REM.…”