Accounting quality in Brazil is higher for companies with a Big N auditor if quality is identified by compliance with disclosure rules or by timeliness of loss recognition. This is in agreement with Holthausen's hypothesis that auditor choice allows companies to opt-out of an environment where enforcement is weak. However, the cross-sectional pattern of discretionary accruals fails to signal quality, if quality is identified with earnings manipulation. In 2000 there is no significant difference between accruals according to auditor type. In 1999 there is, but it is such that companies with a Big N auditor post less income-decreasing accruals than companies with a non-Big N auditor. Given the strong linkage between tax and financial reporting in Brazil, and independent evidence of Big N audit quality, this is consistent with Big N auditors tolerating less aggressive interpretations of the tax code than other auditors.