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I examine whether auditors effectively respond to an assessment of high control risk at the account level. The audit risk model assumes that auditors alter their audit procedures to compensate for a greater risk of material misstatement to maintain a low risk of audit failure (i.e., low audit risk). I use internal control weakness disclosures in interim and annual filings to identify assessments of high control risk within specific accounts, and restatements of these specific accounts to identify account-level audit failures. I find an increased incidence of account-level misstatements when control risk within that particular account is high, suggesting that, on average, auditors do not maintain a consistent level of audit risk at the account level in the presence of high control risk. In further analyses, I examine whether the effectiveness of the auditor’s response varies as auditor effort (measured using excess audit fees) increases. For certain accounts, I find that additional auditor effort mitigates the likelihood of an ineffective response to high control risk, but that this mitigating effect occurs only at high levels of auditor effort. The results of this study provide insight into the effectiveness of auditors’ use of the audit risk model at the account level and suggest areas of the audit where auditors can improve the link between account-level risk assessments and the design, performance, and evaluation of substantive audit tests. ACKNOWLEDGEMENTS This dissertation is the culmination of four years of work and effort to achieve my goal of earning a doctorate degree. Foremost, I want to thank my dissertation committee chair, Dr. Linda Myers, for the mentorship, guidance, patience, and continuous support she provided me throughout the doctoral program. She went to great lengths to help me develop research skills and sharpen my communication. I truly hope the quality of this research reflects on her outstanding mentorship. I would also like to thank Dr. Cory Cassell for the outstanding mentorship, direction, and support he provided me throughout the doctoral program. I am grateful for his honest feedback and guidance. In addition, I would like to thank Dr. Gary Peters Dr. Junhee Han for their helpful comments and suggestions. Finally, I would like to thank my wife, Cheyenne, for her willingness and sacrifice to let me pursue this degree and dream. TABLE OF CONTENTS

The Effective Use of the Audit Risk Model at the Account Level