Author: Timothy A. PearsonPublisher:
ISBN:
Category :
Languages : en
Pages : 230
Book Description
An Investigation of the Relationship Between Audit Fees and Auditor Reputation
Author: Timothy A. PearsonImpact of Audit Fees and Audit Firm's Reputation on Audit Quality
Author: Ammar Qadir SheikhPublisher:
ISBN:
Category :
Languages : en
Pages : 29
Book Description
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.
Effect of Client Reputation on Audit Fees at the Office Level
Author: Sharad AsthanaPublisher:
ISBN:
Category :
Languages : en
Pages :
Book Description
Prior studies have examined the effect of a decline in the auditor's or client's reputation on auditor switching, market shares, and stock prices. We extend these studies by examining the effect of an unexpected increase in a client's reputation on audit fees at the office level. We argue that association with a reputed client will enhance the auditor's reputation and establish a brand name, thus enabling the auditor to charge higher fees from other clients. Using a client's inclusion into the prestigious S&P 500 index as a proxy for the client's change in reputation, we find that the audit fees are discounted for this S&P client when it enters the index. The audit fee for this client increases following its exit from the index. We posit that changes in the audit fees for the S&P 500 clients are attributable to the changes in the reporting quality of these firms following their entry to and exit from the index. We also find increases in the audit fees of non-S&P clients of the audit office around such events. We argue that the presence of S&P clients helps auditors differentiate themselves from other auditors and allows them to extract rents from non-S&P clients. Lastly, we find no evidence of improvement in the reporting quality of other non S&P clients, supporting our rent extraction story.
Auditor Going Concern Reporting
Author: Marshall A. GeigerPublisher: Routledge
ISBN: 1000392031
Category : Business & Economics
Languages : en
Pages : 160
Book Description
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.
Can Audit Fees Inhibit Accounting Misstatements? Moderating Effects of Auditor Reputation from Chinese Experience
Author: Bin LiPublisher:
ISBN:
Category :
Languages : en
Pages : 24
Book Description
We examine the association between audit fees and accounting misstatements, and test the moderating effect of auditor reputation on this association in China, where auditors' legal liability is essentially weak. We find that current-year audit fees are negatively and significantly associated with the likelihood of current-year financial statement being misstated. This result is consistent with prior work, indicating a negative relation between audit fees and future misstatements in a strong litigation environment such as in the United States. This finding indicates that higher audit fees can reflect audit effort, even in a setting where litigation plays essentially no role. Prior literature suggests that audit firms have reputational incentives; thus, we use auditor irregularities and audit firm rank as proxies for auditor reputation and find that the negative relationship between misstatements and audit fees weaken as auditor reputation decreases. Our results indicate that auditor reputation can negatively moderate the relationship between audit fees and misstatements and is more important in the absence of litigation.
Audit Committee Effectiveness
Author: Paul CollierThe Relation Between Auditors' Fees for Non-audit Services and Earnings Quality
Author: Frankel Richard MPublisher: Legare Street Press
ISBN: 9781019501573
Category :
Languages : en
Pages : 0
Book Description
This groundbreaking study explores the relationship between auditors' fees for non-audit services and the quality of earnings reported by companies. Using data from a large sample of publicly traded firms, the authors show that there is a strong correlation between the two variables, and suggest that this could be a cause for concern for investors and regulators. The authors also provide recommendations for improving the transparency and reliability of financial reporting. This book is essential reading for anyone interested in the intersection of accounting, auditing, and corporate governance. This work has been selected by scholars as being culturally important, and is part of the knowledge base of civilization as we know it. This work is in the "public domain in the United States of America, and possibly other nations. Within the United States, you may freely copy and distribute this work, as no entity (individual or corporate) has a copyright on the body of the work. Scholars believe, and we concur, that this work is important enough to be preserved, reproduced, and made generally available to the public. We appreciate your support of the preservation process, and thank you for being an important part of keeping this knowledge alive and relevant.
Auditor Reputation
Author: Peter MoizerPublisher:
ISBN:
Category :
Languages : en
Pages : 0
Book Description
The purpose of this paper is to consider whether some audit firms are perceived by the financial communities of different countries to have higher reputations than other audit firms. The results that will be considered come from three sources: audit fee studies, studies of the issue of new shares and studies of the effects on a company of changing its auditor. The studies reveal that there is considerable evidence that Big Six auditors are differentiated from other audit firms by company directors when recommending to shareholders the appointment of a firm of auditors and its audit fee. The results point to a Big Six audit fee premium of between 16 to 37% across the countries surveyed. Participants in the stock market (investors and bankers) also appear to differentiate between audit firms. The Big Six tend to be associated with a higher quality service in most of the countries surveyed. In addition, there is some evidence of differential effects within the Big Six, with Price Waterhouse being identified with above average reputation in the 1980s in three countries. However, for other Big Six firms any reputational effects appear to be country specific and do not generalize across countries.
Audit Quality
Author: Jonas TritschlerPublisher: Springer Science & Business Media
ISBN: 3658041749
Category : Business & Economics
Languages : en
Pages : 251
Book Description
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.
Hong Kong Auditing
Author: Ferdinand A. GULPublisher: City University of HK Press
ISBN: 9629371413
Category : Business & Economics
Languages : en
Pages : 843
Book Description
This second edition is thoroughly revised to take into account the new Hong Kong Standards on Quality Control, Auditing, Assurance and Related Services, and the numerous developments of a full range of auditing topics since the previous edition. A major feature of this book is that it boldly draws on economic theories to explain aspects of auditing. Certain general concepts which may be applicable in all aspects of an audit is discussed. Published by City University of Hong Kong Press. 香港城市大學出版社出版。