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.

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.

Download or read book Auditor Independence written by Ismail Adelopo and published by Routledge. This book was released on 2016-04-08 with total page 241 pages. Available in PDF, EPUB and Kindle. Book excerpt: In Auditor Independence, Ismail Adelopo argues that the importance of auditors' independence cannot be over-emphasised. Not only do auditors provide certification of the truth and fairness of the information prepared by managers, they also have a duty to express opinions on the degree of compliance with laws and regulations guiding a firm's operations. Theirs is a socially important responsibility. In all that has been proposed to mitigate the governance crisis and restore confidence in the market system, relatively little attention has been paid to auditor independence. Examining the historical role of auditing in corporate governance and the regulatory context, this book sets the function within a theoretical framework and then provides empirical analysis of the problem issues such as the relationship between audit committees and external auditors and the probity of providing non-auditing services to audit clients. The focus on matters that are damaging to market confidence and threatening to the reputation of the auditing profession, means the conclusions and recommendations in this book are important for key stakeholders, including policy makers, regulators, those running companies, and their investors and customers. This is also a book for those responsible for training in the auditing profession and for others with a research or academic interest in the matters addressed.

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.

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.

Download or read book United States and European Union Auditor Independence Regulation written by Christiane Strohm and published by Springer Science & Business Media. This book was released on 2007-12-11 with total page 247 pages. Available in PDF, EPUB and Kindle. Book excerpt: Christiane Strohm investigates the effects of the Sarbanes-Oxley-Act and the revised 8th EU-Directive on auditing. She shows that there is a difference in the communication and safeguarding effects of a regulation, depending on the precision of its wording and that safeguarding effects also depend on auditors' monetary incentives and on perceived costs of litigation.

Download or read book Non audit Services and Auditor Independence written by and published by . This book was released on 2009 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The nature of the client-auditor relationship is a critical issue for stakeholders and other users of the audited financial statements. This type of relationship is predicated on trust; however, it is susceptible to differing motives, conflict of interest, and information asymmetries. An external auditor's independence is crucial to users of audited financial statements. A number of factors may impact the independence of the external auditor. This study investigates stakeholders' perceptions of NAS on auditor independence in Saudi Arabia, where NAS is banned except tax and zakat service. - Abstract.

Download or read book Government Auditing Standards 2018 Revision written by United States Government Accountability Office and published by Lulu.com. This book was released on 2019-03-24 with total page 234 pages. Available in PDF, EPUB and Kindle. Book excerpt: Audits provide essential accountability and transparency over government programs. Given the current challenges facing governments and their programs, the oversight provided through auditing is more critical than ever. Government auditing provides the objective analysis and information needed to make the decisions necessary to help create a better future. The professional standards presented in this 2018 revision of Government Auditing Standards (known as the Yellow Book) provide a framework for performing high-quality audit work with competence, integrity, objectivity, and independence to provide accountability and to help improve government operations and services. These standards, commonly referred to as generally accepted government auditing standards (GAGAS), provide the foundation for government auditors to lead by example in the areas of independence, transparency, accountability, and quality through the audit process. This revision contains major changes from, and supersedes, the 2011 revision.

Download or read book Non Audit Services and Auditor Independence written by Jahidur Md Rahman and published by . This book was released on 2019 with total page 7 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper attempts to investigate the effects of the prohibition of certain non-audit services on the independence of the auditor and based on personal in-depth interviews with the Big 4 auditing firms that are affiliated with local accounting firms in Bangladesh. The approach selected for this research is a qualitative one and has a descriptive and explanatory nature. From this research, it becomes evident that independence has always been a central issue in auditing. All the respondents agreed that the prohibition of non-audit services increase the appearance that the auditing firms are independent. The findings of this paper present an apparent picture of the field of auditing in Bangladesh. It will also guide the researchers for future investigations.

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.

Download or read book Does the Provision of Non Audit Services Affect Investor Perceptions of Auditor Independence 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: A number of recent studies examine whether the joint provision of audit and non-audit services (NAS) impairs auditor independence, and yield mixed results. We examine whether investors perceive auditor independence as being impaired when auditors supply non-audit services, by investigating the association between fee-based measures of non-audit service purchases and the earnings response coefficient (ERC). We find that the non-audit fee-ratio and the level of non-audit fees were negatively associated with ERCs in 2001. When we use unexpected fees (a measure of over- or under-payment of nonaudit fees), we find a negative association between NAS purchases and ERC, but this occurs mainly in the second and third quarters following the release of the proxy. Further investigation reveals that the quarterly differences may be driven by the increasing flow of information (i.e., the first-time disclosures of fees and media analyses of these disclosures) that became available to investors during our sample period. We speculate that, during the course of the year 2001, the increase in information allowed investors to engage in better comparative analyses of the fee disclosures. We interpret our results as indicating that investors did perceive NAS as impairing auditor independence.

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.

Download or read book Corporate Integrity Framework Research Monograph Impact of non audit services on auditor independence written by and published by . This book was released on 2007 with total page 100 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Relation Between Non audit Services and Auditor Independence written by Vivian Li and published by . This book was released on 2002 with total page 300 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Non Audit Services and Auditor Independence written by Sun Min Kang and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In 2014, the EU adopted a bill limiting the non-audit services of auditors, reflecting societal concern that non-audit services provided by auditors can compromise auditor independence. But different from the expectation that the provision of non-audit services by external auditors affects auditor independence, previous studies have shown inconsistent results. What could be the reason? Contracts for non-audit services start from the purchase motive of the company with a need for non-audit services (Firth, 1997; Parkash and Venable, 1993). Simunic (1984) argued that only abnormal companies with special problems purchase non-audit services. However, not all non-audit services sales compromise auditor independence. This study analyzed and illustrated whether the purchase of non-audit services affects auditor independence by the examining the interaction between the performance of audit clients with earnings management incentives and the quasi-rents of the auditor. The results show that the discretionary accruals of corporations with poor management performance increased with statistical significance when they purchased non-audit services from an external auditor. However, among companies with excellent management results, no statistical significance between the purchase of non-audit services and discretionary accruals was identified. Thus, to analyze the effects of non-audit services on auditor independence, researchers should consider the purchase motives of audit clients asking for non-audit services.

Download or read book Non Audit Services and Auditor Independence written by Zulkarnain Muhamad Sori and published by . This book was released on 2005 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: Regulators and stakeholders in worldwide capital markets have placed a great concern on the potential threat of joint provision of audit and non-audit services to audit client on perceived auditor independence. This study reports the research findings of the effects of the joint provision of audit and non-audit services (NAS) on perceived auditor independence from the perspective of Malaysian auditors, loan officers and senior managers of public listed companies. The main findings of the study were that auditor independence would significantly threaten when audit and NAS were jointly provided by audit engagement team, however, this perceptions were changed when exist proper segregation of duties or 'Chinese Wall' in audit firms either by way of staff from separate department or entities.

Download or read book The SEC s Revised Auditor Independence Rules written by Richard I. Miller and published by . This book was released on 2002 with total page 80 pages. Available in PDF, EPUB and Kindle. Book excerpt: