Both regulators and the general public have expressed increasing concerns about earnings manipulations through pension accounting in the post Sarbanes-Oxley (SOX) Act period. For instance, The Economist reported that: “…literally billions of dollars have been conjured on to firms’ balance sheets and profit and loss accounts in recent years, flattering reported earnings. Without manipulations of their pension accounts, industry icons such as IBM, General Motors and Boeing would have reported drastically worse financial results.” (The Economist 2004). Relatedly, in a 2006 public speech Charles Niemeier, board member of the Public Company Accounting Oversight Board (PCAOB), advised the auditing industry to pay more attention to pension accounting, which he believes will significantly improve the financial reporting system (Shaw 2006). Given the increasing concerns regarding companies’ manipulations of pension accounting, it is important to understand whether auditors—the “gatekeepers” of financial reporting quality (Doty 2014)—exercise more effort and thus charge higher audit fees when pension accounting involves higher risk. There are two types of pension plans in the U.S., namely, defined contribution (DC) plans and defined benefit (DB) plans. DB pension accounting is far more complicated than DC pension accounting and estimates in DB pension accounting involve considerable discretion of and prediction by managers (Kieso et al. 2011). Further, small changes in DB pension accounting estimates can have a materialimpact on the sponsoring firm’s reported earnings (An et al. 2014; Bauman and Shaw 2014).1 Therefore, pension accounting provides an appealing setting to examine which factors influence the adjustment of auditors’ effort when confronted with complex accounting estimates and whether increased audit effort mitigates manipulations in complex accounting estimates.