The Economics of Audit Quality

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Publisher : Springer Science & Business Media
ISBN 13 : 1475767285
Total Pages : 203 pages
Book Rating : 4.4/5 (757 download)

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Book Synopsis The Economics of Audit Quality by : Benito Arrunada

Download or read book The Economics of Audit Quality written by Benito Arrunada and published by Springer Science & Business Media. This book was released on 2013-11-11 with total page 203 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book focuses on market mechanisms which protect quality in the provision of audit services. The role of public regulation is thus situated in the context defmed by the presence of these safeguard mechanisms. The book aims to contribute to a better understanding of these market mechanisms, which helps in defining the con tent of rules and the function of regulatory bodies in facilitating and strengthening the protective operation of the market. An analysis at a more general level is provided in the three chapters making up Part 1. In the four chapters of Part 2, on the other hand, this analysis is applied to a particular problem to determine how those non-audit services often provided by auditors to their audit clients should be regulated. Finally, Chapter 8 contains a summary of the analysis and conclusions of the work. The conclusion with regard to non-audit services is that their provision generates beneficial effects in terms of costs, technical competence, professional judgment and competition and, moreover, need not prejudice auditor independence or the quality of these services. This as sessment leads, in the normative sphere, to recommending a legislative policy aimed at facilitating the development and use of safeguards provided by the free action of market forces. Regulation should thus aim to enable the parties-audit firms, self-regulatory bodies and audit clients-to discover through competitive market interaction both the most efficient mix of services and the corresponding quality safeguards, adjusting for the costs and benefits of each possibility.

The Economics of Audit Quality

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Publisher :
ISBN 13 : 9781475767292
Total Pages : 216 pages
Book Rating : 4.7/5 (672 download)

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Book Synopsis The Economics of Audit Quality by : Benito Arrunada

Download or read book The Economics of Audit Quality written by Benito Arrunada and published by . This book was released on 2014-01-15 with total page 216 pages. Available in PDF, EPUB and Kindle. Book excerpt:

On the Economics of Audit Partner Tenure and Rotation

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Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (15 download)

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Book Synopsis On the Economics of Audit Partner Tenure and Rotation by : Brandon Gipper

Download or read book On the Economics of Audit Partner Tenure and Rotation written by Brandon Gipper and published by . This book was released on 2017 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper provides the first partner tenure and rotation analysis for a large cross-section of U.S. publicly listed firms over an extended period. We analyze the effects on audit quality as well as economic tradeoffs related to partner tenure and rotation with respect to audit hours and fees. On average, we find no evidence for audit quality declines over the tenure cycle and little support for fresh-look benefits after rotations. Nevertheless, partner rotations have significant economic consequences. We find increases in audit fees and decreases in audit hours over the tenure cycle, which differ by partner experience, client size, and competitiveness of the local audit market. More generally, our findings are consistent with efforts by the audit firms to minimize disruptions and audit failures around mandatory rotations. We also analyze special circumstances, such as audit firm switches and early partner rotations, and show that they are more disruptive than mandatory rotations, and also more likely to exhibit audit quality effects.

Audit Quality

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Publisher : Springer Science & Business Media
ISBN 13 : 3658041749
Total Pages : 251 pages
Book Rating : 4.6/5 (58 download)

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Book Synopsis Audit Quality by : Jonas Tritschler

Download or read book Audit Quality written by Jonas Tritschler and published by Springer Science & Business Media. This book was released on 2013-10-31 with total page 251 pages. Available in PDF, EPUB and Kindle. Book excerpt: Arising from the author’s experience as a practicing CPA, this book is quite different from other research in this field, as it confronts the subject of audit quality from a pragmatic perspective. The first goal of Jonas Tritschler is to develop an audit quality metric on national audit firm level. Financial reporting errors, as detected by the German enforcement institutions during examinations, which subsequently are published in the German Federal Gazette by the involved companies, are the data basis for this measurement. Using the developed audit quality metric, the second goal of this study is to analyze audit quality differences of selected audit firms by comparing their deployed audit input factors such as employee’s competence (ratio of certified professionals to total audit staff), experience of employees (average tenure of employees in years) and client-specific experience (client fluctuation rate). Results indicate a correlation between audit quality according to the developed metric and the operationalized audit input factors mentioned above.

At the Forefront, Looking Ahead

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Publisher :
ISBN 13 : 9788215031408
Total Pages : 274 pages
Book Rating : 4.0/5 (314 download)

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Book Synopsis At the Forefront, Looking Ahead by : Amir Sasson

Download or read book At the Forefront, Looking Ahead written by Amir Sasson and published by . This book was released on 2018 with total page 274 pages. Available in PDF, EPUB and Kindle. Book excerpt:

The Impact of Economic Bonding on Audit Quality

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

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Book Synopsis The Impact of Economic Bonding on Audit Quality by : Joost van Buuren

Download or read book The Impact of Economic Bonding on Audit Quality written by Joost van Buuren and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In this study we examine the effect of auditor economic bonding (financial dependency on a client) on audit quality. We consider financial dependency as either abnormally high fees in relation to expected hours or vice versa. We consider audits to have credence goods properties where the client has limited ways to assess audit quality that is (likely to be) delivered. This setting provides opportunities for different auditor business strategies. We base our results on a unique, proprietary dataset of audit fees, audit hours, materiality, risk assessments, error detection and auditor reporting decisions taken from the working papers of 681 audit engagements with 2,209 engagement-year observations over the period 2006 to 2011. First, we predict and find that high effort audit engagements (i.e., abnormal high audit hours) are associated with a higher probability of detecting audit differences than low effort audit engagements. Simultaneously, we predict and find that financial dependency on a client lowers the audit quality achieved by high effort as reflected by waiving proposed audit differences. Moreover, our results suggest that auditors facing high independence threats are more highly associated with overstated earnings than when independence threats are low. Consequently, the findings suggest that the negative effects of financial dependency, i.e. economic bonding threats, are a result of the auditors' business relationship with a given client and how the auditor responds to competitive markets.

Audit Lessons from the Economic Crisis: Rethinking Audit Quality

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Publisher :
ISBN 13 : 9789056813208
Total Pages : 20 pages
Book Rating : 4.8/5 (132 download)

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Book Synopsis Audit Lessons from the Economic Crisis: Rethinking Audit Quality by : W. Robert Knechel

Download or read book Audit Lessons from the Economic Crisis: Rethinking Audit Quality written by W. Robert Knechel and published by . This book was released on 2009 with total page 20 pages. Available in PDF, EPUB and Kindle. Book excerpt:

The Economic Consequences of Audit Firms' Quality Control System Deficiencies

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Publisher :
ISBN 13 :
Total Pages : 73 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis The Economic Consequences of Audit Firms' Quality Control System Deficiencies by : Daniel Aobdia

Download or read book The Economic Consequences of Audit Firms' Quality Control System Deficiencies written by Daniel Aobdia and published by . This book was released on 2019 with total page 73 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study seeks to determine the role of audit firms' quality control (QC) system deficiencies, as measured by the Public Company Accounting Oversight Board (PCAOB) inspection program, on audit quality and profitability. Using a unique dataset of firm-wide QC deficiencies identified by the PCAOB during its inspections of audit firms, I find a negative association between QC deficiencies, mainly performance-related, and audit quality. Furthermore, audits conducted by larger audit firms with more organization-level deficiencies appear less profitable, evidenced by more hours worked on the engagements, leading to lower fees per hour. These results appear to be partly explained by deficiencies in the tone at the top (a proxy for culture) and the audit methodology. Further evidence suggests that lack of remediation of QC system deficiencies has a negative influence on audit quality.

Some Economics of Audit Market Reform

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Publisher :
ISBN 13 :
Total Pages : 32 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Some Economics of Audit Market Reform by : Boon Seng Tan

Download or read book Some Economics of Audit Market Reform written by Boon Seng Tan and published by . This book was released on 2016 with total page 32 pages. Available in PDF, EPUB and Kindle. Book excerpt: The purpose of audit market reforms since 2001 is to restore public confidence in the institution of auditing based on two considerations: (1) ensuring audit quality, and (2) controlling the “adverse effect of competition” in audit supply. Market reforms for audit quality are delivered through a package of prescribed actions motivated by an analytical relationship between audit quality and its possible determinants: (1) limiting audit tenure through a combination of mandatory firm rotation, partner rotation and re-tendering; (2) limiting provision of non-audit services (NAS) by incumbent auditor; and (3) joint auditing and empowering the audit committee to enhance audit quality. This paper examines the competing independence hypothesis and expertise hypothesis that produce ambiguous theoretical relationships for audit quality-audit tenure, and independence-provision of NAS. We then review whether empirical literature resolves these conundrums. We also review the usefulness of joint auditing and empowering the audit committee to improve audit quality in the context of audit market reform.

Audit Firms' Network Structure and Audit Quality

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Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (14 download)

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Book Synopsis Audit Firms' Network Structure and Audit Quality by : Maysam Ayoub

Download or read book Audit Firms' Network Structure and Audit Quality written by Maysam Ayoub and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

The Auditor-client Contractual Relationship

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Publisher :
ISBN 13 :
Total Pages : 152 pages
Book Rating : 4.3/5 (512 download)

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Book Synopsis The Auditor-client Contractual Relationship by : Linda DeAngelo

Download or read book The Auditor-client Contractual Relationship written by Linda DeAngelo and published by . This book was released on 1981 with total page 152 pages. Available in PDF, EPUB and Kindle. Book excerpt:

ESG and Financial Performance. The Effects of Audit Quality and National Culture in the Nigerian and Kenyan Context

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Publisher : GRIN Verlag
ISBN 13 : 334683882X
Total Pages : 149 pages
Book Rating : 4.3/5 (468 download)

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Book Synopsis ESG and Financial Performance. The Effects of Audit Quality and National Culture in the Nigerian and Kenyan Context by : Ursule Yvanna Otek Ntsama

Download or read book ESG and Financial Performance. The Effects of Audit Quality and National Culture in the Nigerian and Kenyan Context written by Ursule Yvanna Otek Ntsama and published by GRIN Verlag. This book was released on 2023-03-22 with total page 149 pages. Available in PDF, EPUB and Kindle. Book excerpt: Doctoral Thesis / Dissertation from the year 2022 in the subject Business economics - Business Management, Corporate Governance, grade: 3.9, Dongbei University of Finance and Economics, language: English, abstract: This research is motivated by the need to show whether environmental, social, and governance performance (ESG) is highly linked to the African companies’ performances, and national culture. Besides, this study examines the impacts of audit quality and the national culture on the relationship between financial performance and environmental, social, and governance (ESG) criteria. The introduction of ESG practices has started lately in sub-Saharan African countries, but its implementation has been easier as the African context prones social factors that facilitate its development. Although several studies have explored the nexus between ESG, audit quality and firm financial performance, the outcomes of research on the financial performance-ESG’s relationship are contradicting and further research is needed. These areas include (1) the mediating role of audit quality in the relationship between corporate governance and firm performance; (2) the moderated mediating role of national culture in the relationship between ESG and financial performance through audit quality, (3) the impact of each ESG characteristics such as environment, social, governance scores and audit firm size on firm performance. Thus, the aims of the study are to examine (1) the impact of environment, social, governance criteria on firm financial performance; (2) the relationship environment, social, governance criteria and audit quality; (3) the effect of audit quality on firm financial performance; (4) the mediating role of audit quality in the relationship ESG and firm financial performance; and (5) the ESG performance of companies deviating between firms from different countries, the last key objective is to fill the research gap by examining the moderated mediating role of the four cultural dimensions of Hofstede –power distance, uncertainty avoidance, individualism, and masculinity- on the impact of ESG on firm financial performance through audit quality.

The Economics of Audit Production

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Publisher :
ISBN 13 :
Total Pages : 67 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis The Economics of Audit Production by : Daniel Aobdia

Download or read book The Economics of Audit Production written by Daniel Aobdia and published by . This book was released on 2019 with total page 67 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using proprietary data, we analyze how a variety of audit composition and team characteristics are associated with audit effectiveness and efficiency. We find that more time allocated prior to the final phase of the audit is associated with more effective audits. We also decompose the time allocation and experience characteristics of the core audit engagement team across the following roles: lead partner, engagement quality reviewer, and other experienced team members (comprised of other audit partners, directors, senior managers, and managers). While the lead partner time and experience are not associated with audit effectiveness, we find that more time spent and experience of other experienced team members are associated with more effective audits. Many of the characteristics that improve audit effectiveness do not improve efficiency, but rather are costly to the client, with one exception. Overall, our analysis highlights several cost-benefit tradeoffs to improving audit effectiveness.

Audit Quality and Partner Wealth

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Publisher :
ISBN 13 :
Total Pages : 36 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Audit Quality and Partner Wealth by : Limei Che

Download or read book Audit Quality and Partner Wealth written by Limei Che and published by . This book was released on 2015 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper employs unique and confidential data on audit partners' wealth and audit related variables for a very large sample of firms in a setting where the auditors' risk of litigation and loss of reputation is low. We analyze the relationship between audit quality and audit fees at the partner level and test if the strength of this relationship depends on the engagement partners' private financial position. Overall, we find a negative relationship between audit quality and the fees the engagement partners' obtain from his or her clients, consistent with partners acquiescing to pressure of clients that are of more economic significance to them. Furthermore, this negative relationship is weaker for rich partners, consistent with partners' wealth acting as guards against fee dependence. These results are robust to different measures of audit quality and of the economic bonding that fees create between clients and partners. We only find partial evidence that audit quality is adversely affected by the partners' debt. This paper provides new evidence on how audit quality is associated with the financial position of the engagement partner.

Hong Kong Auditing

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Publisher : City University of HK Press
ISBN 13 : 9629372347
Total Pages : 940 pages
Book Rating : 4.6/5 (293 download)

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Book Synopsis Hong Kong Auditing by : Ferdinard A. GUL

Download or read book Hong Kong Auditing written by Ferdinard A. GUL and published by City University of HK Press. This book was released on 2014-10-13 with total page 940 pages. Available in PDF, EPUB and Kindle. Book excerpt: Over the years auditing has developed into a specialised function with complex ethical, legal and economic implications. The role of auditors in providing credibility is even more important in a society like Hong Kong, which relies heavily on its reputation as an international financial and business centre. The financial crises and accounting scandals reported in recent years, which led to economic meltdowns and massive loss in capital resources across the globe, highlights the vital role of auditors as gatekeepers and the importance of high quality auditing in ensuring corporate transparency and honest financial reporting. The third edition is thoroughly revised to take into account the new Companies Ordinance (Chapter 622, effective 2014) and Hong Kong Standards on Quality Control, Auditing, Assurance and Related Services (updated June 2014), and numerous developments of a full range of auditing topics since the previous edition, including: Auditors legal duties and liabilities Auditor quality Auditors ethical behaviour Corporate governance Statistical sampling Pitfalls in computerisation of accounting services Use of computer-assisted-audit-techniques (CAATs) Audit reporting Auditing standards Along with recent development of the profession and cutting-edge research findings, this book boldly draws on economic theories to explain aspects of auditing. Certain economic concepts that are applicable to all aspects of an audit are addressed for students and practitioners alike. By utilising graphics, tables and intriguing cases, this book will serve as a useful companion for accounting and legal practitioners. This is also a textbook for students preparing for university studies, practical training and professional accounting examinations. At the end of each chapter, there are dozens of exercises, cases and discussion questions for the benefits of teachers, students and life-long learners. Published by City University of Hong Kong Press 香港城市大學出版社出版

Fool Me Once, Shame on You; Fool Me Twice, Shame on Me

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Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (139 download)

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Book Synopsis Fool Me Once, Shame on You; Fool Me Twice, Shame on Me by : Feng Guo

Download or read book Fool Me Once, Shame on You; Fool Me Twice, Shame on Me written by Feng Guo and published by . This book was released on 2023 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Although recent evidence suggests that individual audit partners explain a substantial portion of thevariation in audit quality proxies, much less is known about what determines an audit partner's quality. Psychology and behavioral economics theories hold that an individual's experiences can have enduring impacts on subsequent behavior. We examine whether auditors' direct exposure to Arthur Andersen's collapse has a long-term impact on the quality of their audits. Our evidence implies that audit partners who directly experienced Andersen's demise impose stricter monitoring evident in their clients exhibiting a lower propensity for misstatements and small profits, and paying higher audit fees. Importantly, these findings reconcile with research in finance and economics implying that firsthand experiences matter more to subsequent behavior than general economic conditions or secondhand or thirdhand experiences. Collectively, the results shed light on one facet of how partners' audit quality evolves over time. Our findings suggest that major failures associated with the audit firm in which an auditor works can ultimately result in these affected individuals later delivering higher audit quality, which should benefit audit committees in partner selection decisions and audit firms in designing partner assignment policies.

Audit Quality and Welfare Implications of the External Auditor's Use of the Internal Auditor

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Publisher :
ISBN 13 :
Total Pages : 33 pages
Book Rating : 4.:/5 (299 download)

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Book Synopsis Audit Quality and Welfare Implications of the External Auditor's Use of the Internal Auditor by : Marinus DeBruine

Download or read book Audit Quality and Welfare Implications of the External Auditor's Use of the Internal Auditor written by Marinus DeBruine and published by . This book was released on 1994 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: