Open Access. Powered by Scholars. Published by Universities.®
- Institution
- Publication
- Publication Type
Articles 1 - 4 of 4
Full-Text Articles in Accounting
Does A Lack Of Choice Lead To Lower Quality?: Evidence From Auditor Competition And Client Restatements, Nathan J. Newton, Dechun Wang, Michael S. Wilkins
Does A Lack Of Choice Lead To Lower Quality?: Evidence From Auditor Competition And Client Restatements, Nathan J. Newton, Dechun Wang, Michael S. Wilkins
School of Business Faculty Research
We examine the relationship between auditor competition and the likelihood of financial restatements that occur as a result of failures in the application of GAAP. Policy makers and audit market participants have expressed concern that the current level of auditor competition is low, resulting in a negative impact on audit quality. However, we find that restatements are more likely to occur in metropolitan statistical areas (MSAs) that have higher auditor competition. The association between audit market competition and restatements is statistically and economically significant. Our finding that audit quality is higher when auditor competition is lower suggests that at least …
Non-Audit Fees, Institutional Monitoring, And Audit Quality, Chee Yeow Lim, David K. Ding, Charlie Charoenwong
Non-Audit Fees, Institutional Monitoring, And Audit Quality, Chee Yeow Lim, David K. Ding, Charlie Charoenwong
Research Collection School Of Accountancy
We posit that the effect of non-audit fees on audit quality is conditional on the extent of institutional monitoring. We suggest that institutional investors have incentives and the ability to monitor financial reporting quality. Because of the reputation concerns and potential litigation exposure, auditors are likely to provide high audit quality, when they also provide non-audit services to clients, particularly when clients are subject to high institutional monitoring. We find evidence that, as non-audit fees increase, audit quality (measured by performance-adjusted discretionary current accruals and earnings-response coefficients) reduces only for clients with low institutional ownership but not for clients with …
Bringing Darkness To Light: The Influence Of Auditor Quality And Audit Committee Expertise On The Timeliness Of Financial Statement Restatement Disclosures, Jaime Schmidt, Michael S. Wilkins
Bringing Darkness To Light: The Influence Of Auditor Quality And Audit Committee Expertise On The Timeliness Of Financial Statement Restatement Disclosures, Jaime Schmidt, Michael S. Wilkins
School of Business Faculty Research
This study investigates whether auditor quality and audit committee expertise are associated with improved financial reporting timeliness as measured by the duration of a financial statement restatement’s ‘‘dark period.’’ The restatement dark period represents the length of time between a company’s discovery that it will need to restate financial data and the subsequent disclosure of the restatement’s effect on earnings. For a sample of dark restatements disclosed between 2004 and 2009, we find that companies that engage Big 4 auditors have shorter dark periods than companies that do not engage Big 4 auditors. We also find that companies with more …
The Effect Of Audit Market Concentration On Audit Pricing And Audit Quality : The Role Of The Size Of The Audit Market, John Daniel Eshleman
The Effect Of Audit Market Concentration On Audit Pricing And Audit Quality : The Role Of The Size Of The Audit Market, John Daniel Eshleman
LSU Doctoral Dissertations
The GAO has recently expressed concern that audit market concentration (i.e., not client concentration) could result in greater audit fees and lower audit quality. However, the extant literature finds that local audit markets with higher concentration have lower audit fees (Numan and Willekens 2012) and fewer accounting restatements (Newton et al. 2013). In this study, I show that the effect of audit market concentration on the level of audit fees depends on the size of the audit market (i.e., the size and/or number of clients in the local geographic area). When the audit market contains fewer clients and/or those clients …