Download or read book The Effect of Control Risk Audit Firm Size and Auditor Change on Audit Fees written by Mo Lin Yeung and published by . This book was released on 1999 with total page 226 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Does Audit Firm Size Matter The Effect of Audit Firm Size Measured by Audit Firm Revenues Number of Offices and Professional Headcounts on Audit Quality and Audit Fees written by Gil S. Bae and published by . This book was released on 2013 with total page 54 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using audit firm size measured by audit firm revenues, the number of offices, and professional headcounts, we find that audit firm size measured as continuous variable is positively associated with engagement-level audit quality proxied by discretionary accruals and modified opinions, and is also positively associated with audit fees. The Big 4 audit firms differ considerably in size and their size also measured by revenues, the number of offices, and professional headcounts is significantly associated with the audit quality and audit fee differences across Big 4 auditors. However, we find only limited evidence of the hypothesized relation between associate-to-partner ratio (i.e., human capital leverage) and audit quality, and find no evidence that associate-to-partner ratio is associated with audit fees.
Download or read book The Effect of Auditing Standard No 5 on Audit Fees written by Jayanthi Krishnan and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In June 2007, the PCAOB issued Auditing Standard No. 5 (AS5), superseding Auditing Standard No. 2 (AS2). AS5 significantly changed the rules relating to audits of internal control over financial reporting (ICFR). Policymakers expected AS5 to lead to improvements in audit efficiency and thus a general reduction in audit costs, and specifically a reduction in fees for smaller and less complex companies that were disproportionately affected by AS2. We investigate the impact of the change from AS2 to AS5 on audit fees. We restrict our analysis to stable client-auditor combinations to ensure that auditors had prior AS2 experience with the client before the transition to AS5. We find that, after controlling for other factors, audit fees were lower in the first two years of implementation of AS5 relative to the last year of AS2. The decrease in fees was the highest for companies that had remediated material weaknesses in their internal control and thus moved from an adverse opinion under AS2 to a clean opinion under AS5. Further, firms that received first-time adverse opinions on their internal control in the AS5 period paid lower fee premiums (relative to firms with clean opinions) than did firms with adverse reports in the last AS2 year. Finally, in contrast to policymakers' expectation that AS5 would generate cost savings by allowing the ICFR audits to be “scaled” for small and less complex firms, there is no evidence that the smallest firms benefited. Specifically, audit fee savings were found only for relatively more complex firms (measured by multiple segments and international operations).
Download or read book Intangible Assets Values Measures and Risks written by John R.M. Hand and published by OUP Oxford. This book was released on 2003-02-20 with total page 558 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Impact of Regulation on Auditor Fees written by Aloke Ghosh and published by . This book was released on 2015 with total page 45 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine changes in fees paid to auditors around the Sarbanes-Oxley Act (SOX, 2002). Audit fees are expected to increase after SOX due to both increased audit effort and potentially increased auditors' legal liability. Our results indicate an economically large increase in audit fees following the enactment of SOX. Controlling for size of the auditor, auditor's opinion, and client characteristics, we find that audit fee levels went up approximately 74 percent in the post-SOX period. In contrast, non-audit fees declined significantly over the same period. Total fees went up during this period because the increase in audit fees offset the decline in non-audit fees. Our conclusions remain unchanged when we use audit fee change regressions. Additionally, we find that the Big 4 audit firms increased audit fees by 42 percent more than their smaller counterparts. Further, we find that while small and large audit firms discount fees on initial engagements to attract new clients for the pre-SOX period, only small audit firms continue of offer fee discounts for the post-SOX years. Our results remain robust even after a battery of sensitivity analyses.
Download or read book Changing Auditors and the Effect on Earnings Auditors Opinions and Stock Prices written by Nancy Rueyhwa Mangold and published by . This book was released on 1988 with total page 184 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Developments in the Audit Methodologies of Large Accounting Firms written by W. Morley Lemon and published by . This book was released on 2000 with total page 38 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Laboratory Study of the Effects of Auditor s Business Risk on Audit Scope written by Judith Christina Walo and published by . This book was released on 1990 with total page 504 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Routledge Companion to Auditing written by David Hay and published by Routledge. This book was released on 2014-09-15 with total page 387 pages. Available in PDF, EPUB and Kindle. Book excerpt: Auditing has been a subject of some controversy, and there have been repeated attempts at reforming its practice globally. This comprehensive companion surveys the state of the discipline, including emerging and cutting-edge trends. It covers the most important and controversial issues, including auditing ethics, auditor independence, social and environmental accounting as well as the future of the field. This handbook is vital reading for legislators, regulators, professionals, commentators, students and researchers involved with auditing and accounting. The collection will also prove an ideal starting place for researchers from other fields looking to break into this vital subject.
Download or read book Auditor Size Partner specialization and Private Company Audit Adjustments written by Zachary T. Kowaleski and published by . This book was released on 2018 with total page 57 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study examines whether auditor size and partner-specialization predict audit adjustments when privately-owned broker-dealers (BDs) change audit firms. Private company auditors have relatively low incentives to compete on quality because managers may select the auditor without involving an audit committee, and these audits present relatively lower reputation and litigation risks compared to public companies. Though I predict that larger firms will provide higher audit quality in this environment, it is unclear whether partner-specialists' will use their BD domain-knowledge to provide higher audit quality where the market does not demand it. Analyses reveal that BDs that change to a larger (smaller) auditor are more (less) likely to record material audit adjustments. BDs that change to a specialist partner, however, are less likely to record material audit adjustments; partners from BD audit firms with no issuer clients drive this effect. Using a subsample with available fee and hour data shows that the auditor size improvements to audit quality correspond with increases to fees and hours, but also incremental to hours. Conversely, partner-specialists employ fewer audit hours than non-specialists. Collectively, these results show that smaller firms, especially the partner-specialists within those firms, are willing to tolerate a higher risk of material misstatement than larger firms will accept when the demand for audit quality is low.
Download or read book Responsiveness of Auditors to the Audit Risk Standards written by Lasse Niemi and published by . This book was released on 2018 with total page 35 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the effect of changes in audit risk standards on the conduct of financial statement audits in a European setting. We investigate this by analysing the audit hours and audit fees for clients of Big 4 audit firms in Finland in 1996 and 2010. Our results show that audit firms became more sensitive to clients' business risk due to the introduction of the new audit risk standards, with more audit hours allocated to owner-managed companies in 2010 than in 1996, and fewer audit hours allocated to low-risk clients in 2010 than in 1996. Also, the labour mix in the audit team changed for owner-managed companies, with a greater work load carried by junior auditors in 2010 than in 1996. Regarding the price of audit, we find an increase in audit fees for clients with high business risk while audit fees remained at roughly the same level for low-risk clients. These findings should be of interest to the auditing profession and those involved in the development of auditing regulations.
Download or read book An Exploratory Study of the Effects of Product Differentiation and Economies of Scale on External Audit Fees written by Willie Earl Gist and published by . This book was released on 1988 with total page 234 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Impact of Audit Fees and Audit Firm s Reputation on Audit Quality written by Ammar Qadir Sheikh and published by . This book was released on 2020 with total page 29 pages. Available in PDF, EPUB and Kindle. Book excerpt: Audit quality is viewed as a basic element influencing the dependability of financial statements. The objective of this study is to investigate the impacts of audit firm characteristics, including audit firms' reputation and audit fees on the quality of auditing. We utilized discretionary/irregular accruals serving as a proxy for income manipulation, and audit firms' reputation (Big 4 auditors vs Non-Big 4 auditors), and audit fees are utilized to examine the quality of auditing. A sample comprised of 49 listed firms from the KSE-100 index of Pakistan Stock Exchange (PSX) is selected for the duration of 5 years. The data is evaluated through multiple regression and correlations. The outcomes suggested that audit Fee seems to have a significant and negative effect on the quality of auditing, Audit quality also seems to affect ROA negatively, whereas, audit fee affected ROA positively. Lastly, the Big 4 representation has a negative effect on cash flows, whereas audit quality seems to have an inverse effect. The outcomes indicate that non-Big 4 audit firms in Pakistan perform higher quality of auditing than Big 4 audit firms. In addition to that, the outcome discloses that in exchange of higher audit fees, auditors perform lower quality of audits. The basic job of audit quality has gathered remarkably academic consideration. Though, earlier researches have basically centered on organizations operating in developed nations. Very limited is investigated about the quality of auditing in developing economies, for example, Pakistan. This investigation would increase the predetermined number of researches conducted on the quality of auditing of listed firms in developing nations.
Download or read book When Big 4 Dominance is Broken written by Zixuan Lina Li and published by . This book was released on 2018 with total page 264 pages. Available in PDF, EPUB and Kindle. Book excerpt: In 2013, audit firm mergers created two “Chinese” audit firms – Ruihua and BDO Lixin – that outranked EY and KPMG to become two of the four largest audit firms in China in terms of total audit revenue. In this thesis, I examine the impact of this change in audit industry structure on the economic behavior, i.e. audit pricing and audit quality, of these two large local audit firms – or Big L – relative to the Big 4 and the other local audit firms. Using a difference-in-differences design, I find that the pre-post change in audit fees for the Big L auditors is significantly higher than that for the Big 4 and the other local audit firms around the mergers. In addition, I find that the Big L firms had a significant improvement in audit quality after the mergers, relative to the Big 4 firms over the same period. That is, holding everything else constant, the Big L had higher propensity to issue modified audit opinions and their clients exhibited improved earnings quality in the post-merger period. In contrast, I find evidence of a decline in audit fees and deterioration of earnings quality for clients of the Big 4 auditors around the mergers. I interpret the results as consistent with a shift in the relative market power among the large audit suppliers in China and the development of brand name reputations by the Big L firms, which provided the ability and incentive for the Big L firms to conduct higher quality audits in the post-merger period. On the other hand, the Big 4 audit firms lost some market power and auditor independence as new large competitors emerged in the industry. This thesis answers calls by Francis (2011) and DeFond and Zhang (2014) for further research on the effects of changes in market structure in the audit industry. Implications for various regulators, including the Ministry of Finance of PRC, the European Commission, and the U.S. SEC, are discussed.
Download or read book Service Quality written by Leonard L. Berry and published by McGraw-Hill Professional Publishing. This book was released on 1989 with total page 248 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Effect of Auditor Changes on Earnings Opinions and Stock Prices written by Nancy Rueyhwa Mangold and published by . This book was released on 1984 with total page 352 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Price cutting and Transaction Costs in the Market for Audit Services written by Iris A. Pirozzoli and published by . This book was released on 1990 with total page 240 pages. Available in PDF, EPUB and Kindle. Book excerpt:
