Variable	Definition and measurement (Data source)
Audit effort: dependent variable
AUDITFEE	Audit effort: Natural logarithm of audit fees in £GBP millions (hand-collected from annual reports)
Materiality: variables of interest (all hand-collected from expanded audit reports and annual reports)
AMT	Audit materiality threshold: Monetary value of audit materiality threshold scaled by total assets * 100
B’MARKS (1/0)	Auditor benchmark choices: Indicator variable: 1 = assets; 0 = other1
NONGAAP (1/⁠0)	GAAP/non-GAAP benchmark: Indicator variable: 1 = non-GAAP benchmark; 0 = GAAP benchmark
EXCL (1/0)	Non-GAAP recurring/non-recurring exclusions: Indicator variable 1 = excluding recurring items; 0 = excluding non-recurring items
T’HOLDDIFF	Non-GAAP/GAAP threshold difference: Monetary amount of positive difference between actual non-GAAP audit materiality threshold and estimated GAAP audit materiality threshold (GAAP profit benchmark (profit/loss before tax) * non-GAAP % rate) in £GBPm2
Control variables
Client complexity
#RISKS	Number of risks reported by auditor in audit report (hand-collected from expanded audit reports)
RESTRUCT	Restructuring and acquisition costs/gain recorded as exceptional items in the annual report scaled by total assets * 100 (hand-collected from annual reports)
LISTINGS (1/0)	Listings: Indicator variable: 1 = company lists on another stock exchange in addition to London Stock Exchange; 0 = company lists on London Stock Exchange only (hand-collected from corporate website/annual reports)
NEWCLIENT (1/⁠0)	New client of audit firm: Indicator variable: 1 = new client of audit firm in current year; 0 = not a new client of audit firm in current year (hand-collected from annual reports)
Other auditor and client characteristics
AUDBUSY (1/0)	Audit busyness: Indicator variable: 1 = busy: company year-end 15 December to 31 March; 0 = non-busy: other year-end (hand-collected from annual reports)
TENURE	Auditor tenure: Natural logarithm of number of years the audit firm has been auditing the company (hand-collected from annual reports)
CLIENTSIZE	Client size: Natural logarithm of company’s equity market value in £GBP millions (obtained £GBP value from Datastream)
ACMTG	Audit committee meetings: Natural logarithm of number of audit committee meetings in 2015 (hand-collected from annual reports)
AGE	Company age: Natural logarithm of number of years since a company’s incorporation (obtained from FAME)
LEV	Leverage: Long-term debt/total assets * 100 (obtained from Datastream)
EARNS Δ (1/0)	Earnings change (i.e. profit before tax change): Indicator variable: 1 = positive profit before tax change (2015 – 2014); 0 = negative profit before tax change (hand-collected from annual reports)
AUDFIRM CONTROLS (1/⁠0)	Audit firm: Four indicator variables 1 = PwC; 2 = KPMG; 3 = Deloitte; 4 = EY (hand-collected from expanded audit reports)
INDCONTROLS (1/0)	Industry: Five indicator variables 1 = Financials; 2 = Technologies; 3 = Consumers; 4 = Resources; 5=Industrials (obtained from FTSE sector classification)3