The Contagion Effect Of Low Quality Audits Along Individual Auditors

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The Contagion Effect of Low-Quality Audits Along Individual Auditors

Author : Liuchuang Li
Publisher :
ISBN 13 :
Total Pages : 55 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis The Contagion Effect of Low-Quality Audits Along Individual Auditors by : Liuchuang Li

Download or read book The Contagion Effect of Low-Quality Audits Along Individual Auditors written by Liuchuang Li and published by . This book was released on 2015 with total page 55 pages. Available in PDF, EPUB and Kindle. Book excerpt: Francis and Michas (2013) discover that the occurrence of an audit failure actually signals a more systematic problem with audit quality at the affected office. Using the Chinese setting where the identities of engagement auditors are revealed in audit reports, this study further explores whether the phenomenon of contagion is isolated to some specific auditors in an office or it indeed is an office-wide problem. We follow Francis and Michas (2013) to define an audit failure as an instance where a client firm subsequently makes a downward restatement of audited earnings. While we find similar evidence of contagion of low quality audits at office locations experiencing audit failures, the contagion effect actually is confined to the (other) audits performed by those specific auditors who are involved in audit failures, and it does not spread to the same-office auditors not involved in failures. We further find that the contagion effect is attenuated among female auditors, and for auditors with an accounting degree, with longer auditing experience, and with industry expertise. Our results suggest that the documented contagion effect of low quality audits is an individual auditor-level, rather than office-level, phenomenon. This underscores the importance of engagement auditor identification and the usefulness of disclosing auditors' personal characteristics.

Is Audit Behavior Contagious? Teamwork Experience and Audit Quality by Individual Auditors

Author : Lixin (Nancy) Su
Publisher :
ISBN 13 :
Total Pages : 58 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Is Audit Behavior Contagious? Teamwork Experience and Audit Quality by Individual Auditors by : Lixin (Nancy) Su

Download or read book Is Audit Behavior Contagious? Teamwork Experience and Audit Quality by Individual Auditors written by Lixin (Nancy) Su and published by . This book was released on 2019 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using a comprehensive sample of audits for public companies in China, we demonstrate whether and how bad audit behavior spreads among individual auditors (i.e., CPAs). CPAs are deemed to be “diseased” during the period when their audits fail, and are subsequently sanctioned by the regulators. We first confirm that sanctioned CPAs systematically provide low-quality audits in terms of audit reporting and accounting irregularities during the diseased period. We then document that CPAs who have teamed up with the sanctioned CPAs are also more likely to issue lenient audit opinions and have accounting irregularities in their audited financial reports during the sanctioned CPAs' diseased period. This contagion effect is, however, hardly present among CPAs who work in the same audit firm as sanctioned CPAs but are only indirectly connected to them. Our findings highlight the importance of analyzing social learning via teamwork experience in understanding how audit quality at the individual level is shaped.

The Contagion Effect of Office-level Audit Failures

Author : Paul Nicholas Michas
Publisher :
ISBN 13 :
Total Pages : 79 pages
Book Rating : 4.:/5 (872 download)

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Book Synopsis The Contagion Effect of Office-level Audit Failures by : Paul Nicholas Michas

Download or read book The Contagion Effect of Office-level Audit Failures written by Paul Nicholas Michas and published by . This book was released on 2011 with total page 79 pages. Available in PDF, EPUB and Kindle. Book excerpt: I investigate if the presence of an audit failure in an auditor office location in agiven fiscal year indicates the presence of a contagion effect on the quality of otherconcurrent audits conducted by the office. Audit quality is inferred by cross-sectionaldifferences in clients' audited earnings, specifically, abnormal accruals. I find that thepresence of at least one audit failure (defined as a downward restatement of net incomeby a client) is indicative of contagion within the office. Specifically, for offices with oneor more client restatements, abnormal accruals of other clients in the office are significantly larger (on average) than in those offices that have no restatements. Thisresult holds for offices of both Big Four and non-Big Four auditors. Further analysisindicates the contagion in Big Four offices occurs in smaller offices and in Big Fouroffices where a low percentage of audits are conducted in those industries in which anoffice is the city-level industry leader (irrespective of office size).

Auditing Teams

Author : Mara Cameran
Publisher : Taylor & Francis
ISBN 13 : 1134825536
Total Pages : 133 pages
Book Rating : 4.1/5 (348 download)

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Book Synopsis Auditing Teams by : Mara Cameran

Download or read book Auditing Teams written by Mara Cameran and published by Taylor & Francis. This book was released on 2017-03-31 with total page 133 pages. Available in PDF, EPUB and Kindle. Book excerpt: The recent audit failures which have rocked financial markets worldwide have accentuated the need for a better understanding of the link between risk, control and audit quality; as well as emphasising the need to open the "black box" of the ways auditing firms actually function. Reflecting these imperatives, Auditing Teams unravels the organizational and management issues in audit firms that are key to achieving effectiveness in service provision. Specifically, this key research reflects upon the relevance and dynamics of auditing teams and their impact on auditing quality, and specifically responding to the recent claim from regulators which highlights auditing team characteristics as the source of wide variations in quality. By leveraging different perspectives – auditing, management accounting, organization and psychology – to investigate auditing teams and basing on evidence collected from the professional world, this book will provide a unique insight into the role of auditing teams on audit quality. It will be of great interest to scholars and advanced students in auditing, as well as to practitioners and regulators in the field.

Opening the Black Box of Audit Quality

Author : Derrald Stice
Publisher :
ISBN 13 :
Total Pages : 58 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Opening the Black Box of Audit Quality by : Derrald Stice

Download or read book Opening the Black Box of Audit Quality written by Derrald Stice and published by . This book was released on 2017 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines the effect of individual auditor quality (below the partner level) on overall audit quality. We aggregate audit employee-level performance evaluations to create a measure of auditor quality at the office level. We find that high quality audit offices are associated with a lower likelihood of client restatement, fewer client abnormal accruals, and a higher likelihood of a client receiving a going concern opinion. We partition employees into low, medium, and high level, based on job title, in order to investigate which employee levels drive these results. We find that the restatement results are driven by high quality high-level employees (Senior Managers/Directors), while the going concern results are driven by high quality low-level employees (Seniors). Furthermore, we find evidence that high quality audit teams are associated with all aspects of audit quality and the magnitude of these team effects are much larger than those of the effects for any individual employee type. These findings are consistent with higher-level auditors preventing the most serious financial statement deficiencies, low-level employees contributing to audit firm independence, and overall team quality creating synergy which has the strongest effect on all aspects of audit quality. Overall, our empirical results suggest that individual auditor quality is associated with higher quality audits, and that employees at all levels affect audit outcomes.

Auditing Transformation

Author : Jan Marton
Publisher : Taylor & Francis
ISBN 13 : 100092694X
Total Pages : 420 pages
Book Rating : 4.0/5 (9 download)

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Book Synopsis Auditing Transformation by : Jan Marton

Download or read book Auditing Transformation written by Jan Marton and published by Taylor & Francis. This book was released on 2023-08-25 with total page 420 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book identifies drivers of transformation of auditing, including regulation, digitalisation, sustainability, and individual auditor characteristics, and discusses how the drivers affect auditing. It provides a holistic perspective, discussing these current and highly relevant themes in depth and ‘one by one’ and also stresses the importance of the temporal dimension, i.e., offering a historical and a present-day perspective. The book covers several different theoretical perspectives when analysing and discussing how the various drivers affect auditors, the audit process, accounting firms, stakeholders and so on. Sweden is used as a setting to study the effects of these drivers of transition. The Swedish experience is generalisable to other European countries, with a Germanic origin currently influenced by Anglo-American ideas of auditing. In addition, Sweden provides a research setting with unique access to empirical data. The monograph is unique in its broad coverage of drivers of transformation, combined with its clear focus on financial auditing. It is informed by a wide range of research approaches, from qualitative interview studies to recently developed machine learning methods. Readers, therefore, benefit from a comprehensive understanding of current changes in the audit industry. This will be a useful reference work for students of accounting and auditing, as well as for audit practitioners, including both auditors and regulators, and for researchers.

Do Individual Auditors Affect Audit Quality? Evidence from Archival Data

Author : Ferdinand A. Gul
Publisher :
ISBN 13 :
Total Pages : 52 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Do Individual Auditors Affect Audit Quality? Evidence from Archival Data by : Ferdinand A. Gul

Download or read book Do Individual Auditors Affect Audit Quality? Evidence from Archival Data written by Ferdinand A. Gul and published by . This book was released on 2015 with total page 52 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine whether and how individual auditors affect audit outcomes using a large set of archival Chinese data. We analyze about 800 individual auditors and find that they exhibit significant variation in audit quality. The effects that individual auditors have on audit quality are both economically and statistically significant, and are pronounced in both large and small audit firms. We also find that the individual auditor effects on audit quality can be partially explained by auditor characteristics, such as educational background, Big N audit firm experience, rank in the audit firm, and political affiliation. Our findings highlight the importance of scrutinizing and understanding audit quality at the individual auditor level.

Why Diversity, Equity, And Inclusion Matter: Challenges And Solutions

Author : Bin Srinidhi
Publisher : World Scientific
ISBN 13 : 9811278423
Total Pages : 501 pages
Book Rating : 4.8/5 (112 download)

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Book Synopsis Why Diversity, Equity, And Inclusion Matter: Challenges And Solutions by : Bin Srinidhi

Download or read book Why Diversity, Equity, And Inclusion Matter: Challenges And Solutions written by Bin Srinidhi and published by World Scientific. This book was released on 2023-12-05 with total page 501 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book integrates the current research on diversity, equity, and inclusion with corporate practice and describes how these initiatives affect organizations' morale, performance, and output. Academic researchers, corporate executives tasked with implementing Diversity, Equity & Inclusion (DEI), and regulators face the problem of balancing DEI initiatives, which could generate diverse ideas beneficial to the organization, with concerns about diluting meritocracy. Building a diverse workforce could improve both organizational well-being and social harmony. Research has shown that building a diverse workforce often results in communication and coordination issues and unjustified pay and performance gaps, engendering feelings of exclusion among diverse individuals. The book describes how organizations address these issues in various settings ranging from accounting firms to health care providers. It covers settings with gender and racial diversities and clarifies the difference between equality and equity. Its coverage includes dealing with concealable disabilities and promoting equity across diverse populations in organizational and social settings.

Do Clients Avoid 'contaminated' Offices?

Author : Robert Lowell Whited
Publisher :
ISBN 13 :
Total Pages : 60 pages
Book Rating : 4.:/5 (119 download)

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Book Synopsis Do Clients Avoid 'contaminated' Offices? by : Robert Lowell Whited

Download or read book Do Clients Avoid 'contaminated' Offices? written by Robert Lowell Whited and published by . This book was released on 2014 with total page 60 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study investigates whether local audit offices suffer financially following their association with low-quality audits. The announcement of a restatement indicates that the contracting auditor failed to detect and correct a material misstatement. Therefore, I predict that office reputation suffers following restatements of previously audited financial information. As the frequency of restatement announcements increases, the perceived pervasiveness of systematic audit failures (‘contamination’) within the office will increase accordingly. I document that contaminated offices (Big 4 and non-Big 4) suffer a decline in market share relative to their peers. Furthermore, when examining auditor retention decisions at the individual client level, I find that clients are more likely to dismiss auditors associated with greater ‘contamination’ and select auditors with lower contamination. This relation is observed for both restating and non-restating clients. Overall, evidence suggests that restatements impair a local office’s reputation and that the cost of a restatement extends beyond the restating engagement.

Auditor Going Concern Reporting

Author : Marshall A. Geiger
Publisher : Routledge
ISBN 13 : 1000392031
Total Pages : 160 pages
Book Rating : 4.0/5 (3 download)

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Book Synopsis Auditor Going Concern Reporting by : Marshall A. Geiger

Download or read book Auditor Going Concern Reporting written by Marshall A. Geiger and published by Routledge. This book was released on 2021-06-09 with total page 160 pages. Available in PDF, EPUB and Kindle. Book excerpt: Auditor reporting on going-concern-related uncertainties remains one of the most challenging issues faced by external auditors. Business owners, market participants and audit regulators want an early warning of impending business failure. However, companies typically do not welcome audit opinions indicating uncertainty regarding their future viability. Thus, the auditor’s decision to issue a "going concern opinion" (GCO) is a complex and multi-layered one, facing a great deal of tension. Given such a rich context, academic researchers have examined many facets related to an auditor’s decision to issue a GCO. This monograph reviews and synthesizes 182 recent GCO studies that have appeared since the last significant review published in 2013 through the end of 2019. The authors categorize studies into the three broad areas of GCO: (1) determinants, (2) accuracy and (3) consequences. As an integral part of their synthesis, they summarize the details of each study in several user-friendly tables. After discussing and synthesizing the research, they present a discussion of opportunities for future research, including issues created or exacerbated as a result of the global COVID-19 pandemic. This monograph will be of assistance to researchers interested in exploring this area of auditor responsibility. It will also be of interest to auditing firms and individual practitioners wanting to learn what academic research has examined and found regarding this challenging aspect of audit practice. Auditing standard-setters and regulators will find it of interest as the authors review numerous studies examining issues related to audit policy and regulation, and their effects on GCO decisions. The examination of GCO research is extremely timely given the financial and business disruption caused by the worldwide COVID-19 pandemic. This unprecedented global event has caused companies, auditors and professional bodies to revisit and reassess their approach to going concern, and to think even more deeply about this fundamental business imperative.

Bargaining Power Strength, Audit Failure Contagion Effect and Audit Quality

Author : Ching-Lung Chen
Publisher :
ISBN 13 :
Total Pages : 152 pages
Book Rating : 4.:/5 (858 download)

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Book Synopsis Bargaining Power Strength, Audit Failure Contagion Effect and Audit Quality by : Ching-Lung Chen

Download or read book Bargaining Power Strength, Audit Failure Contagion Effect and Audit Quality written by Ching-Lung Chen and published by . This book was released on 2004 with total page 152 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Consequences of Low-Quality Audits for Engagement Partners

Author : Daniel Aobdia
Publisher :
ISBN 13 :
Total Pages : 46 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Consequences of Low-Quality Audits for Engagement Partners by : Daniel Aobdia

Download or read book Consequences of Low-Quality Audits for Engagement Partners written by Daniel Aobdia and published by . This book was released on 2019 with total page 46 pages. Available in PDF, EPUB and Kindle. Book excerpt: We investigate the consequences of low-quality audits for engagement partners in the US and the role audit firm quality control systems play in this process. We employ a sample period during which the identity of the engagement partner on specific audits is not publicly known to isolate the effect of quality control systems on partner management. We find that restatements result in partner changes for both restating and non-restating clients. Because the identity of the partner on an audit is not publicly known, non-restating clients may not be fully aware of the restatements associated with their engagement partners. We find that audit firms with ineffective partner quality control systems take advantage of this opaque information environment and do not replace low quality partners, especially if the partners can bring in large audit fees. Even if these audit firms replace the partner, they do not supply a new partner with higher quality. Our results highlight the importance of an effective quality control system in disciplining partners. When audit firm quality control systems fail, enhanced transparency through disclosing the identity of the engagement partner may be necessary in disciplining the auditing labor market.

Perspectives of Management Accounting for Sustainable Business Practices

Author : Oncioiu, Ionica
Publisher : IGI Global
ISBN 13 : 1668445972
Total Pages : 299 pages
Book Rating : 4.6/5 (684 download)

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Book Synopsis Perspectives of Management Accounting for Sustainable Business Practices by : Oncioiu, Ionica

Download or read book Perspectives of Management Accounting for Sustainable Business Practices written by Oncioiu, Ionica and published by IGI Global. This book was released on 2022-06-30 with total page 299 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the 21st century, management accounting gains new dimensions, expanding its research area. Additionally, management of sustainable performance is one of the phenomena faced by the current business environment, and in particular management corporations. The focus of management on profitability remains the main objective of any company, but it must also take into account the sustainability of social, economic, and environmental aspects. Under these circumstances, managerial decisions must be adjusted and strongly substantiated considering the information required by internal and external stakeholders including financial reporting. The information requirements of customers and other stakeholders are steadily increasing, and some companies face certain problems in implementing the concept of sustainability and environmental reporting. Perspectives of Management Accounting for Sustainable Business Practices proposes an interdisciplinary perspective and explores various theoretical and practical approaches to management accounting and its impact in the 21st century on different areas of activity. It contrasts external financial accounting for government regulators and the investment community with internal management accounting for managers to leverage decision making. Covering topics such as corporate social responsibility, disclosure issues, and performance analysis, this premier reference source is an essential resource for business leaders and executives, accountants, financial controllers, business analysts, budgeting managers, students and faculty of higher education, librarians, researchers, and academicians.

Improving Business Performance Through Innovation in the Digital Economy

Author : Oncioiu, Ionica
Publisher : IGI Global
ISBN 13 : 1799810070
Total Pages : 272 pages
Book Rating : 4.7/5 (998 download)

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Book Synopsis Improving Business Performance Through Innovation in the Digital Economy by : Oncioiu, Ionica

Download or read book Improving Business Performance Through Innovation in the Digital Economy written by Oncioiu, Ionica and published by IGI Global. This book was released on 2019-09-06 with total page 272 pages. Available in PDF, EPUB and Kindle. Book excerpt: In the 21st century, advancements in the digital world are bringing about rapid waves of change in organizational management. As such, it is increasingly imperative to discover ways for businesses to adapt to changes in the markets and seize various digital marketing opportunities. Improving Business Performance Through Innovation in the Digital Economy is an essential reference source for the latest research on the impact of digital computing. It investigates new economic and entrepreneurial approaches to enhancing community development. Featuring research on topics such as business ethics, mobile technology, and cyber security, this book is ideally designed for knowledge workers, business managers, executives, entrepreneurs, small and medium enterprise managers, academicians, researchers, students, and global leaders seeking coverage on the management of sustainable enterprises.

CSR and Management Accounting Challenges in a Time of Global Crises

Author : Oncioiu, Ionica
Publisher : IGI Global
ISBN 13 : 1799880710
Total Pages : 278 pages
Book Rating : 4.7/5 (998 download)

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Book Synopsis CSR and Management Accounting Challenges in a Time of Global Crises by : Oncioiu, Ionica

Download or read book CSR and Management Accounting Challenges in a Time of Global Crises written by Oncioiu, Ionica and published by IGI Global. This book was released on 2021-06-25 with total page 278 pages. Available in PDF, EPUB and Kindle. Book excerpt: Modern companies are subject to increasing pressures to conduct their business in an environmentally responsible manner due to social and environmental problems. Management of sustainable performance is one of the phenomena faced by the current business environment and, in particular, management corporations. The focus of management on profitability remains the main objective of any company, but it must also take into account the sustainability of social, economic, and environmental aspects. Under these circumstances, managerial decisions need to be adjusted and strongly substantiated, considering the information required by internal and external stakeholders, including financial reporting. The information requirements of customers and other stakeholders are steadily increasing, and some companies face certain problems in implementing the concept of sustainability and environmental reporting. CSR and Management Accounting Challenges in a Time of Global Crises is a comprehensive reference source that explores various theoretical and practical approaches of management accounting and its impact in the 21st century and investigates new accounting and financial approaches where economic and social aspects become mutually supportive to enhance their impact on community development. Covering topics such as CSR reporting, sustainability, and greenwashing, this book is an essential resource for academicians, specialty organizations, chief financial officers (CFOs), financial controllers, business analysts, financial planning and analysis (FP&A) analysts, budgeting managers, students, researchers, and business environment managers and specialists.

On the Nature of Auditing: "The Audit Partner Effect"

Author : Jan Paul van Buuren
Publisher :
ISBN 13 : 9789089800152
Total Pages : 246 pages
Book Rating : 4.8/5 (1 download)

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Book Synopsis On the Nature of Auditing: "The Audit Partner Effect" by : Jan Paul van Buuren

Download or read book On the Nature of Auditing: "The Audit Partner Effect" written by Jan Paul van Buuren and published by . This book was released on 2009 with total page 246 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Encyclopedia of Organizational Knowledge, Administration, and Technology

Author : Khosrow-Pour D.B.A., Mehdi
Publisher : IGI Global
ISBN 13 : 1799834743
Total Pages : 2734 pages
Book Rating : 4.7/5 (998 download)

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Book Synopsis Encyclopedia of Organizational Knowledge, Administration, and Technology by : Khosrow-Pour D.B.A., Mehdi

Download or read book Encyclopedia of Organizational Knowledge, Administration, and Technology written by Khosrow-Pour D.B.A., Mehdi and published by IGI Global. This book was released on 2020-09-29 with total page 2734 pages. Available in PDF, EPUB and Kindle. Book excerpt: For any organization to be successful, it must operate in such a manner that knowledge and information, human resources, and technology are continually taken into consideration and managed effectively. Business concepts are always present regardless of the field or industry – in education, government, healthcare, not-for-profit, engineering, hospitality/tourism, among others. Maintaining organizational awareness and a strategic frame of mind is critical to meeting goals, gaining competitive advantage, and ultimately ensuring sustainability. The Encyclopedia of Organizational Knowledge, Administration, and Technology is an inaugural five-volume publication that offers 193 completely new and previously unpublished articles authored by leading experts on the latest concepts, issues, challenges, innovations, and opportunities covering all aspects of modern organizations. Moreover, it is comprised of content that highlights major breakthroughs, discoveries, and authoritative research results as they pertain to all aspects of organizational growth and development including methodologies that can help companies thrive and analytical tools that assess an organization’s internal health and performance. Insights are offered in key topics such as organizational structure, strategic leadership, information technology management, and business analytics, among others. The knowledge compiled in this publication is designed for entrepreneurs, managers, executives, investors, economic analysts, computer engineers, software programmers, human resource departments, and other industry professionals seeking to understand the latest tools to emerge from this field and who are looking to incorporate them in their practice. Additionally, academicians, researchers, and students in fields that include but are not limited to business, management science, organizational development, entrepreneurship, sociology, corporate psychology, computer science, and information technology will benefit from the research compiled within this publication.