Download or read book Auditor Fees Around Dismissals and Resignations written by Paul A. Griffin and published by . This book was released on 2008 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper offers new findings on the relation between auditor dismissals and resignations and audit fees. Unlike the prior research, which studies the fees of auditors after an auditor change, we focus on audit fees before an auditor change. Our evidence shows that incumbent auditors charge unusually higher fees at least one year prior to an auditor change event. The existence of unusual fee adjustments by incumbents may serve as a precursor of such events. In the case of dismissals, we reason that if clients perceive the presence of unusually higher audit fees as an indication that their costs are excessive, this should prompt a switch in auditors. We find evidence consistent with this view. For resignations, we interpret unusually higher incumbent fees not as a sign of client-perceived excess but as a signal by auditors that resignation companies reflect higher levels of audit risk or liability, which incumbents capture as additional fees. Eventually, however, the additional fees are insufficient, and the auditor resigns. While our results are based mostly on the audit fee disclosures after Sarbanes-Oxley, we control for and find similar results for periods not dominated by the legislation. Our results are similar for each of the Big 4 firms.
Download or read book The Effects of Auditor Dismissals and Resignations on Audit Fees written by Paul A. Griffin and published by . This book was released on 2009 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper assesses the effects of auditor dismissals and resignations on audit fees and, in particular, whether companies pay more or less for their audits around these events. We also test the hypotheses that the fee discount around a dismissal can be explained by the benefits of auditor incumbency and the fee premium around a resignation varies in relation to the additional audit effort and litigation risk of the incoming auditor. We base our study on a comprehensive sample of audit fee disclosures made by SEC registrants during fiscal years 2000 to 2004, so that our study period includes auditor changes before and after the Sarbanes-Oxley (SOX) legislation. For dismissals, we find that not only does the successor auditor discount fees, and in a way that supports our discounting hypothesis, but also that fees are discounted one year before the auditor change by the incumbent auditor, consistent with the view that the threat of a dismissal may influence fees. For resignations, fees are higher one year before and after the event indicating that both the incumbent and incoming auditor charge a premium around a resignation, possibly because the new auditor needs to cope with greater than normal litigation risk and/or audit effort. SOX appears not to have affected discounting around a dismissal, but the fee premium around a resignation increases following the legislation, consistent with our resignation hypothesis. We also find that non-audit fees are discounted around a dismissal, and this result too appears to be unchanged by SOX.
Download or read book Audit Fees Around Dismissals and Resignations written by Paul A. Griffin and published by . This book was released on 2011 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper offers new findings about how audit fees vary around auditor dismissals and resignations. For dismissals, we find evidence of lower than normal fees before and after an auditor change, consistent with the view that both incumbent and successor auditors adjust fees downward to retain the client. Our evidence also shows that incumbent and successor auditors charge unusually high fees before and after a resignation. We interpret the higher than normal incumbent fees as an indication that resignation companies reflect unusual levels of audit effort or risk, which the incumbent auditor captures as additional fees. Eventually, however, the additional fees are insufficient, inducing the incumbent to resign. A fee premium by the successor auditor after resignation also supports this view.
Download or read book Litigation Risk and Auditor Resignations written by Jayanthi Krishnan and published by . This book was released on 2014 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Litigation against auditors has increased dramatically in recent years. Auditors can offset litigation risk in a number of ways, including improved audit quality and planning, increases in audit fees and increases in the issuance of modified opinions. Auditors can also adjust their client portfolios by becoming more selective in their choice of new clients and by withdrawing from high-risk engagements. We test the hypothesis that litigation risk motivates auditor resignations by comparing resignation companies with two groups of client companies that dismissed their auditors: one matched with the resignation companies on industry and year, and the other matched on year alone. We find resignation companies differ from dismissal companies along dimensions that capture the probability of litigation: financial distress, variance of abnormal returns, auditor independence, tenure and a modified (particularly going-concern) opinion. We also construct a litigation proxy based on a prior litigation-prediction model and find that the proxy is positively associated with the probability that the auditor will resign rather than be dismissed from the engagement. Our analysis is consistent with concerns expressed by the accounting profession that litigation pressures lead to the withdrawal of audit services for a segment of the market.
Download or read book Determinants and Consequences of Auditor Resignations and Dismissals written by Kathleen Marie Hertz and published by . This book was released on 2006 with total page 194 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Auditor Resignations and the Market for Audit Services written by Kannan Raghunandan and published by . This book was released on 1999 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper examines the market for audit services when the incumbent auditor of an SEC registrant has resigned from the engagement. While many previous studies of auditor changes have examined auditor dismissals by the client, only a few studies have specifically focused on auditor resignations. Auditor resignations constitute a unique setting because they may indicate increased likelihood of possible future losses to the new auditor, and provide an opportunity to test the demand-and-supply side incentives in the market for audit services.Results from analyses of 156 auditor resignations and a control sample of 375 auditor dismissals indicate that Big 6 firms were less likely to serve as the successor auditor when the predecessor has resigned, after controlling for three other factors identified as proxies for litigation risk to the auditor (client?s financial stress, industry membership and proportion of total assets in receivables and inventory). The effects were especially pronounced for the subset of resignees in financial stress. These results support suggestions that the implications of auditor resignations are different from auditor dismissals, and provide supporting evidence for the suggestions that supply-side incentives should be considered in examining the market for audit services.
Download or read book Auditor Resignations Versus Dismissals written by Jeff P. Boone and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This study addresses whether an auditor change (a resignation or a dismissal) mitigates information asymmetry as measured by market liquidity or trading activity. For auditor dismissals our results show no effect on our sample firms' market liquidity or trading activity. By contrast, for auditor resignation firms, the market liquidity tests indicate that the 12 month period preceding the 8K filing is characterized by rising information asymmetry. Also, our trading activity analysis suggests that the 8K auditor resignation filing is informative for individual investors but fails to support such informativeness for institutional investors. Our findings lend support for the SEC's decision to differentiate between auditor resignations and dismissals in the 8K. However, the resignation announcement does not appear to decrease information asymmetry subsequent to the 8K filing, which is inconsistent with the presumed SEC objective of maintaining public confidence in the securities markets as a level playing field by mitigating information asymmetry.
Download or read book Auditor Search Periods As Signals of Engagement Risk written by Vivek Mande and published by . This book was released on 2018 with total page 15 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the effect of auditor search periods (time taken from the dismissal/resignation of the old auditor to the appointment of the new auditor) on successor auditor choice and audit fees. Using a sample of auditor changes during the period 2002-2012, we find that clients associated with long search periods are less likely to be accepted by Big N auditors. Our results also show that successor auditors charge their clients higher initial audit fees following lengthier searches. Finally, we document that delays in appointing successor auditors following resignations are associated with a significantly negative stock market response. Our results suggest that investors, regulators and academics should be heedful of lengthy auditor search periods in their evaluations of audit quality and client risks.
Download or read book Corporate Governance Matters written by David Larcker and published by FT Press. This book was released on 2020-10-07 with total page 561 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Definitive Guide to High-Performance Corporate Governance Fully updated for the latest research, trends, and regulations, Corporate Governance Matters, Third Edition, offers comprehensive and objective information for everyone seeking to improve corporate governance—from directors to institutional investors to policymakers and researchers. To help you design highly effective governance, David Larcker and Brian Tayan thoroughly examine current options, reviewing what is and isn't known about their impact on organizational performance. Throughout, they take a strictly empirical and non-ideological approach that reflects rigorous statistical and research analysis and real-life examples. They address issues ranging from board structure, processes, operations, and functional responsibilities to institutional investors, outside stakeholders, and alternative forms of governance. New discussions of: Environmental, Social, and Governance (ESG) activity and ratings Stakeholder interests CEO activism CEO misbehavior Cybersecurity risks Extensively revised coverage of: Executive compensation Leadership and succession planning Director recruitment, evaluation, turnover, and more The authors' balanced approach provides useful tools for making better, more informed decisions on governance.
Download or read book Audits of Public Companies written by United States. General Accounting Office and published by Nova Publishers. This book was released on 2008 with total page 154 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book examines (1) concentration in the market for public company audits, (2) the potential for smaller accounting firms' growth to ease market concentration, and (3) proposals that have been offered by others for easing concentration and the barriers facing smaller firms in expanding their market shares.
Download or read book Advances in Accounting Behavioral Research written by Donna Bobek Schmitt and published by Emerald Group Publishing. This book was released on 2013-08-22 with total page 279 pages. Available in PDF, EPUB and Kindle. Book excerpt: Advances in Accounting Behavioral Research publishes high-quality research encompassing all areas of accounting and addressing a broad range of issues that affect the users, preparers, and assurers of accounting information. Further, this research incorporates theory from, and contributes knowledge and understanding to, applied psychology, sociolog
Download or read book Advances in Quantitative Analysis of Finance and Accounting New Series 2012 Vol 10 written by Cheng F. Lee and published by Center for PBBEFR & Airiti Press. This book was released on 2012-12-01 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Advances in Quantitative Analysis of Finance and Accounting (New Series) is an annual publication designed to disseminate developments in the quantitative analysis of finance and accounting. The publication is a forum for statistical and quantitative analyses of issues in finance and accounting as well as applications of quantitative methods to problems in financial management, financial accounting, and business management. The objective is to promote interaction between academic research in finance and accounting and applied research in the financial community and the accounting profession.
Download or read book ACCA Options P7 Advanced Audit and Assurance UK Revision Kit 2014 written by BPP Learning Media and published by BPP Learning Media. This book was released on 2014-06-01 with total page 529 pages. Available in PDF, EPUB and Kindle. Book excerpt: The examining team reviewed P7 Practice & Revision Kit provides invaluable guidance on how to approach the exam. It contains past ACCA exam questions for you to try and a question plan to assist with your revision. Three mock examinations provide ample opportunity to practise questions and marking schemes show you how the examiner awards marks.
Download or read book Business Sustainability Corporate Governance and Organizational Ethics written by Zabihollah Rezaee and published by John Wiley & Sons. This book was released on 2019-11-06 with total page 971 pages. Available in PDF, EPUB and Kindle. Book excerpt: A comprehensive framework for understanding the most important issues in global business This is the e-book version of Business Sustainability, Corporate Governance, and Organizational Ethics. In today's business environment, multinational corporations are under pressure from investors, lawmakers, and regulators to improve their corporate governance, business sustainability, and corporate culture. Business sustainability, corporate governance, and organizational ethics are taking center stage in the global business environment. This long-awaited text covers each of these three important areas in detail, guiding readers to a robust understanding with features including chapter summaries, essential terms, discussion questions, and cases for each topic covered.
Download or read book SEC responses to the Treadway Commission report written by and published by . This book was released on 1988 with total page 352 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The City Record written by New York (N.Y.) and published by . This book was released on 1886 with total page 986 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book SEC Docket written by United States. Securities and Exchange Commission and published by . This book was released on 1996 with total page 1650 pages. Available in PDF, EPUB and Kindle. Book excerpt:
