Read Books Online and Download eBooks, EPub, PDF, Mobi, Kindle, Text Full Free.
Do Non Audit Service Fees Impair Auditor Independence Evidence From Going Concern Audit Opinions
Download Do Non Audit Service Fees Impair Auditor Independence Evidence From Going Concern Audit Opinions full books in PDF, epub, and Kindle. Read online Do Non Audit Service Fees Impair Auditor Independence Evidence From Going Concern Audit Opinions ebook anywhere anytime directly on your device. Fast Download speed and no annoying ads. We cannot guarantee that every ebooks is available!
Book Synopsis Do Non-Audit Service Fees Impair Auditor Independence? Evidence from Going-Concern Audit Opinions by : Mark L. DeFond
Download or read book Do Non-Audit Service Fees Impair Auditor Independence? Evidence from Going-Concern Audit Opinions written by Mark L. DeFond and published by . This book was released on 2002 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: We find no evidence that non-audit service fees impair auditor independence, where independence is surrogated by auditors' propensity to issue going concern audit opinions. We do find, however, that auditors are more likely to issue going concern opinions to clients paying higher audit fees, suggesting that auditors behave with relatively greater independence towards these clients. Our findings are consistent with Reynolds and Francis (2001) and suggest that market-based incentives, such as loss of reputation and litigation costs, dominate the benefits auditors are likely to receive from compromising their independence to retain clients that pay larger fees. Overall, our findings indicate that recent SEC regulations based on concerns that non-audit services impair auditor independence, are unfounded.
Book Synopsis Non-Audit Fees and Auditor Independence by : Paul A. Griffin
Download or read book Non-Audit Fees and Auditor Independence written by Paul A. Griffin and published by . This book was released on 2010 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper reexamines the long-standing issue of whether the consulting fees earned by auditors affect their independence. The evidence in the United States is far from settled in this regard and continues to vex academics, professionals, and policy makers alike. Our model predicts a negative relation between auditor supplied non-audit fees and auditor independence. We test this model by examining auditors' propensity to issue a going concern opinion for a sample of U.S. companies experiencing financial stress. Using a grouping approach to reduce potential measurement error in the variables, we document a reliable negative relation between non-audit fees and our proxy for auditor independence, which is consistent with our theory. This new evidence, based on an alternative procedure, may explain why some previous studies on U.S. companies have failed to find a negative relation. We also find that SOX and associated influences on auditor independence, but not auditor tenure, may have moderated this negative relation.
Book Synopsis Audit Fees, Non-Audit Fees and Auditor Going-Concern Reporting Decisions in the United Kingdom by : Ilias G. Basioudis
Download or read book Audit Fees, Non-Audit Fees and Auditor Going-Concern Reporting Decisions in the United Kingdom written by Ilias G. Basioudis and published by . This book was released on 2008 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study empirically examines audit reports provided to financially stressed companies in the United Kingdom and the magnitude of audit and non-audit service fees paid to the company's auditors. We find that the magnitude of both audit fees and non-audit fees are significantly associated with the issuance of a going-concern modified audit opinion. In particular, financially stressed companies with high audit fees are more likely to receive a going-concern modified audit opinion, whereas companies with high non-audit fees are less likely to receive a going-concern modified audit opinion. Additional analyses indicate that the results are generally robust across alternative model and variable specifications. Overall, evidence supports the contention that high non-audit fees have a detrimental effect on going-concern reporting judgments for financially stressed U.K. companies.The accounting profession has come under increased scrutiny over recent years about the growing number of non-audit fees received from audit clients and the possible negative impact of such fees on auditor independence. The argument advanced is that providing substantial amounts of non-audit services to clients may make it more likely that auditors concede to the wishes of the client management when difficult judgments are made. Such concerns are particularly salient in the case of reporting decisions related to going-concern uncertainties for financially stressed clients.This study empirically examines audit reports provided to financially stressed companies in the United Kingdom and the magnitude of audit and non-audit service fees paid to the company's auditors. We find that the magnitude of both audit fees and non-audit fees are significantly associated with the issuance of a going-concern modified audit opinion. In particular, financially stressed companies with high audit fees are more likely to receive a going-concern modified audit opinion, whereas companies with high non-audit fees are less likely to receive a going-concern modified audit opinion. Additional analyses indicate that the results are generally robust across alternative model and variable specifications. Overall, evidence supports the contention that high non-audit fees have a detrimental effect on going-concern reporting judgments for financially stressed U.K. companies.
Book Synopsis The Relation Between Auditors' Fees for Non-Audit Services and Earnings Quality (Classic Reprint) by : Richard M. Frankel
Download or read book The Relation Between Auditors' Fees for Non-Audit Services and Earnings Quality (Classic Reprint) written by Richard M. Frankel and published by Forgotten Books. This book was released on 2018-03-03 with total page 94 pages. Available in PDF, EPUB and Kindle. Book excerpt: Excerpt from The Relation Between Auditors' Fees for Non-Audit Services and Earnings Quality This paper provides empirical evidence on the relation between non-audit services and earnings quality. We test hypotheses concerning: (1) the association between a firm's purchase of non-audit services from its auditor and earnings management, and (2) the stock price reaction to the disclosure of non-audit fees. In the past decade there has been a dramatic increase in the proportion of fee revenue auditors derive from non-audit services, yet we know little about how non-audit services are related to earnings quality.1 Concern about the effect of non-audit services on the financial reporting process was a primary motivation for the Securities and Exchange Commission (sec) to issue revised auditor independence rules on November 15, 2000. The rules require firms to disclose the amount of all audit and non-audit fees paid to its auditor. About the Publisher Forgotten Books publishes hundreds of thousands of rare and classic books. Find more at www.forgottenbooks.com This book is a reproduction of an important historical work. Forgotten Books uses state-of-the-art technology to digitally reconstruct the work, preserving the original format whilst repairing imperfections present in the aged copy. In rare cases, an imperfection in the original, such as a blemish or missing page, may be replicated in our edition. We do, however, repair the vast majority of imperfections successfully; any imperfections that remain are intentionally left to preserve the state of such historical works.
Book Synopsis Does Client Importance Affect Auditor Independence at the Office Level? Empirical Evidence from Going Concern Opinions by : Chan Li
Download or read book Does Client Importance Affect Auditor Independence at the Office Level? Empirical Evidence from Going Concern Opinions written by Chan Li and published by . This book was released on 2010 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates whether client importance affects auditor independence within the local offices of audit firms. Client importance is measured as the proportion of audit fees, non-audit service fees, or total fees that a distressed, public client contributes to the total public-client revenue earned by the individual audit offices. Auditor independence is measured as the auditor's propensity to issue a going-concern opinion. The paper focuses on changes in the relation between fee ratios and auditor reporting decisions from the pre-SOX (2001) to post-SOX (2003) period. In the pre-SOX period, I do not find statistically significant association between any of the fee ratios and the auditor's propensity to issue a going concern opinion. However, in the post-SOX period, I find evidence that higher audit fee and total fee ratios are positively associated with the auditor's propensity to issue a going concern opinion. That is, post-SOX, relatively more important clients are more likely to receive a going concern opinion. These results allay concerns that auditor independence is compromised for significant clients.
Book Synopsis Does the Performance of Non-Audit Services by Auditors Impair Independence? Evidence from Firms Post-Service Performance by : Thomas Lau
Download or read book Does the Performance of Non-Audit Services by Auditors Impair Independence? Evidence from Firms Post-Service Performance written by Thomas Lau and published by . This book was released on 2009 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines whether the provision of non-audit services by a firm's own auditors provides value to the firm. We examine the future return on assets and sales growth as a function of the expenditures by the client firms on non-audit services, reasoning that if such payments are intended primarily to impair auditor independence, no association with future firm performance should be detected. Our findings show that, in fact, the payments to auditors for non-audit services are positively related to the one-period ahead sales growth. We interpret these findings as suggesting that firms do obtain value for their expenditures on non-audit services provided by their auditors. Thus, even if auditor independence is compromised by such hiring, the value obtained by the client firms for their non-audit services may justify their hiring.
Book Synopsis The Relation Between Auditors' Fees for Non-audit Services and Earnings Quality by : Richard M. Frankel
Download or read book The Relation Between Auditors' Fees for Non-audit Services and Earnings Quality written by Richard M. Frankel and published by . This book was released on 2002 with total page 44 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the association between the provision of non-audit services and earnings quality. Because of concerns regarding the effect of non-audit services on financial reporting credibility, the Securities and Exchange Commission recently issued revised auditor independence rules requiring firms to disclose in their annual proxy statement the amount of fees paid to auditors for audit and non-audit services. Using data collected from proxy statements filed between February 5, 2001 and June 15, 2001, we present evidence that firms purchasing more non-audit services from their auditor are more likely to just meet or beat analysts' forecasts and to report larger absolute discretionary accruals. However, the purchase of non-audit services is not associated with meeting other earnings benchmarks. We also find that the unexpected component of the non-audit to total fee ratio is negatively associated with stock returns on the filing date. These results are consistent with arguments that the provision of non-audit services strengthens an auditor's economic bond with the client and that investors price this effect. Keywords: Auditor independence; Auditor fees; Earnings management; Discretionary accruals. JEL Classification: G12, M41, M43, M49, L84.
Book Synopsis Does the Provision of Non?Audit Services Impair Auditor Independence? by : Allen T. Craswell
Download or read book Does the Provision of Non?Audit Services Impair Auditor Independence? written by Allen T. Craswell and published by . This book was released on 2010 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: The provision of management advisory and other services by auditors to their audit clients has long been regarded, by regulators in Australia and overseas, as a threat to auditor independence. Evidence of the impact of non?audit services on auditors' independence has been derived using case studies and questionnaires and has focused on perceptions of independence. The aim of this paper is to investigate whether the provision of non?audit services impairs auditor independence by testing for an association between the provision of non?audit services and auditors' reporting opinions. Based on publicly available information for Australian listed companies for several years, the evidence suggests that auditors' decisions to qualify their opinions are not affected by the provision of non?audit services.
Book Synopsis Non-Audit Service Fees and Audit Quality by : Chee Yeow Lim
Download or read book Non-Audit Service Fees and Audit Quality written by Chee Yeow Lim and published by . This book was released on 2013 with total page 59 pages. Available in PDF, EPUB and Kindle. Book excerpt: Recent studies on whether the provision of non-audit services impairs audit quality document mixed results, depending on the proxy for auditor quality used. We posit that the effect of non-audit fees on audit quality is conditional on auditor industry specialization in that audit quality is less likely to be impaired in the case of industry specialist auditors providing non-audit services. Our premise is that industry specialist auditors are more likely to be concerned about reputation losses and litigation exposure, and to benefit from knowledge spillovers from the provision of non-audit services. We find some evidence that audit quality (as measured by increased propensity to issue going-concern opinion, increased propensity to miss analysts' forecasts, as well as higher earnings-response coefficients) is less likely to be reduced for firms that acquire non-audit services from industry specialist auditors compared to non-specialist auditors. Implications are discussed.
Book Synopsis Association Between Audit Opinion and Provision of Non-Audit Services by : Nasrollah Ahadiat
Download or read book Association Between Audit Opinion and Provision of Non-Audit Services written by Nasrollah Ahadiat and published by . This book was released on 2013 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Purpose - While a few US studies on the impact of the provision of non-audit services on auditor judgment have found potential harm to independence, it is the purpose of this study to investigate whether the British and Australian auditors' involvement with both audit and non-audit services for the same clients may also produce similar results.Design/Methodology/Approach - The parametric t-tests and the nonparametric Mann-Whitney tests are used in this study on the empirical data from the British and Australian companies to examine the potential for loss of independence when high levels of non-audit services are provided to audit clients.Findings - The results corroborated the US Securities and Exchange Commission's contention that the provision of non-audit services may indeed impair independence.Research Limitations/Implications - No attempts were made to isolate the effects of other factors that could result in the issuance of qualified opinions. In addition, the sample used in this investigation is comprised of firms that had voluntarily disclosed non-audit fees in the early years of the study. This could potentially introduce a self-selection bias. Nevertheless, this study is one of a kind in the international arena.Originality/Value - This paper extends the line of research examining the impact of non-audit services on the auditor's independence.
Book Synopsis Does Selling Non-Audit Services Impair Auditor Independence? New Research Says, 'Yes' by : Monika Causholli
Download or read book Does Selling Non-Audit Services Impair Auditor Independence? New Research Says, 'Yes' written by Monika Causholli and published by . This book was released on 2015 with total page 12 pages. Available in PDF, EPUB and Kindle. Book excerpt: A recently published academic study by Causholli, Chambers, and Payne (2014) brings new evidence to a long-standing debate about whether the provision of non-audit services (NAS) can impair auditor independence. Prior research on this question has largely found no evidence of lower financial reporting quality when auditors provide high levels of NAS. By considering the potential that future NAS, rather than current NAS levels, could impair auditor independence, Causholli et al. bring a fresh perspective on the question. They argue that it is the potential for new NAS revenue that would most likely cause auditors to have impaired independence. They find strong evidence that audit quality suffers when clients are willing to purchase future NAS from their auditor.
Book Synopsis Audit and Non-audit Service Provision by : Sylvia Chai
Download or read book Audit and Non-audit Service Provision written by Sylvia Chai and published by . This book was released on 2000 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study investigates whether auditors compromise their independence when they provide audit and non-audit services jointly to their clients. The relationship between the level of non-audit services fees and two independence-related measures: (i) the level of earnings management and (ii) the type of audit opinion issued, is examined. The results indicate that for Big 6 audited companies purchasing higher levels of non-audit services engage in higher levels of earnings management compared to companies purchasing a lower level of non-audit services from their incumbent auditor. However, the study finds that high level purchasers of non-audit services are not more likely to receive a clean opinion compared to low level purchasers of non-audit services. In order to explain the conflicting results, further tests are conducted to determine whether companies that purchase concurrently a high level of non-audit services and indulge in high levels of earnings management are more likely to receive a clean audit opinion. This is important since auditors will only be perceived as compromising their independence if they fail to issue qualifications when the level of earnings management is high. The findings indicate that no relationship exists between the type of audit opinion issued and the interaction between the level of non-audit service fees and the level of earnings management. Hence, it is concluded that auditors do not impair their independence in terms of willingness to issue deserved qualifications when providing joint services.00000 g.
Book Synopsis The Association between Non-Audit Services and the Propensity of Going Concern Qualifications by : Divesh Sharma
Download or read book The Association between Non-Audit Services and the Propensity of Going Concern Qualifications written by Divesh Sharma and published by . This book was released on 2002 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the association between non-audit fees (NAS) as a proportion of total fees (PROPNAS) and auditors' propensity to issue a going concern qualification to clients facing imminent bankruptcy. Clients generating higher (lower) PROPNAS are expected to be less likely (more likely) to receive a going concern qualification in the year immediately preceding bankruptcy. The results of the study, using a small sample of 49 bankrupt Australian companies, are consistent with the hypothesized association between PROPNAS and the propensity of a going concern qualification. Implications of the results for auditor independence are discussed.
Book Synopsis Audit Fees, Non-Audit Services and Auditor-Client Economic Bonding by : Jeffrey Coulton
Download or read book Audit Fees, Non-Audit Services and Auditor-Client Economic Bonding written by Jeffrey Coulton and published by . This book was released on 2007 with total page 39 pages. Available in PDF, EPUB and Kindle. Book excerpt: We investigate whether auditor independence is compromised by either the mix of audit and non audit services (NAS), or simply unusually large NAS or audit fees. The results help reconcile apparently conflicting evidence in prior studies linking NAS and indicators of earnings management, as well as providing new insights on the relation between the incentive structures faced by auditors and variation in audit quality. Using the unexpected accrual component of earnings as a proxy for the effect of impaired auditor independence, we initially find that client firms purchasing an unexpectedly large NAS fee mix (i.e., relative to audit fees) display some evidence of aggressive accounting. However, when we explicitly allow for the possibly endogenous nature of unexpected accruals and unexpected NAS, this result no longer holds. In contrast, similar evidence of a positive relation between the magnitude of unexpectedly large audit fees and positive unexpected accruals still occurs (albeit more weakly) after explicitly allowing for possible endogeneity. A significant positive association between unexpected total fees (audit plus NAS) and the magnitude of positive unexpected accruals is even more robust. However, further tests shows that these quot;resultquot; are confined to clients of Non-Big 6 auditors. We therefore conclude that for large audit firms, the incentive to protect larger than expected fees is outweighed by the importance of their reputation for providing high quality audits relative to smaller audit firms. The results also highlight how sensitive conclusions about possible quot;NAS effectsquot; are to the choice of proxy for economic bond as well as the precise experimental design.
Book Synopsis Non-Audit Services and Auditor Independence by : Yu (Elli) Zhang
Download or read book Non-Audit Services and Auditor Independence written by Yu (Elli) Zhang and published by . This book was released on 2015 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the effect on auditor independence of auditors providing non-audit services in the Norwegian audit market. We report the results of three tests of independence of mind and one test of independence in appearance. These tests find that there is a positive relationship between audit fees and non-audit fees, which does not suggest loss of independence. Further analysis using two-stage least squares shows that audit and non-audit fees are jointly determined, and the results are still not consistent with loss of independence. There is no relationship between the provision of non-audit services and the frequency with which auditors issue modified audit opinions. There is no association between non-audit services and audit tenure. Finally, we examine the relationship between unexpected or excess non-audit fees and cost of capital. There is no relationship. Our findings fail to find any evidence for loss of independence of mind or loss of independence of appearance as a result of providing non-audit services.
Book Synopsis Non-Audit Services Provided to Audit Clients, Independence of Mind and Independence in Appearance by : Domenico Campa
Download or read book Non-Audit Services Provided to Audit Clients, Independence of Mind and Independence in Appearance written by Domenico Campa and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates whether the provision of non-audit services (NAS) to audit clients impairs auditor independence of mind and independence in appearance. The main contributions of this paper are in terms of its timeliness with respect to regulatory changes, the simultaneous examination of both forms of auditor independence and the methodological innovation whereby it uses a variable derived from the level of abnormal audit fees as a moderating variable in order to capture the direct impact of the NAS fee level on auditor independence as well as how its influence is moderated by the level of unexpected audit fees. Our results indicate that auditor independence of mind is compromised by the size of NAS fees, particularly for clients who pay below the level of expected audit fee. The stock market perceives that auditor independence is compromised by NAS fees but, at the same time, additional tests indicate that there are benefits that accrue from NAS and, in particular, the relation between return and non-discretionary net income is increasing in NAS fees. The balance of evidence suggests that the EU is correct in undertaking some reform of the auditing market.
Book Synopsis Auditor Independence by : Ferdinand A. Gul
Download or read book Auditor Independence written by Ferdinand A. Gul and published by . This book was released on 2007 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines whether the impact of non-audit fees on auditor independence is contingent on auditor tenure. The results, based on a sample of 4,720 U.S. firms for the years 2000 and 2001, show that there is a positive association between non-audit fees and positive discretionary current accruals, a proxy for auditor independence, for firms with short auditor tenure of not more than three years. These findings suggest that non-audit fees may impair auditor independence when auditor tenure is short and not when auditor tenure is long. Furthermore, exploratory analyses show that the positive association between non-audit fees and earnings management for firms with short auditor tenure is significant for small clients but not for large clients. Taken together, these results suggest that the association between non-audit fees and auditor independence is contingent upon auditor tenure, and that high non-audit fees have a negative impact on auditor independence when audit tenure is short and client firm size is small.
