Open Access. Powered by Scholars. Published by Universities.®
Articles 1 - 7 of 7
Full-Text Articles in Business
Information Sharing Between Mutual Funds And Auditors, Ole‐Kristian Hope, Pingui Rao, Yanping Xu, Heng Yue
Information Sharing Between Mutual Funds And Auditors, Ole‐Kristian Hope, Pingui Rao, Yanping Xu, Heng Yue
Research Collection School Of Accountancy
This paper examines whether there is information sharing between mutual funds and their auditors about the auditors’ other listed firm clients. Using data from the Chinese market, we find that mutual funds earn higher profits from trading in firms that share the same auditors. The effects are more pronounced when firms have a more opaque information environment and when the audit partners for the fund and the partners for the listed firm share school ties. The evidence is consistent with information flowing from auditors to mutual funds, providing mutual funds with an information advantage in firms that share the same …
Spillover Effects Of Clients’ Tax Enforcement On Financial Statement Auditors: Evidence From A Discontinuity Design, Travis K. Chow, Jeffrey Pittman, Muzhi Wang, Le Zhao
Spillover Effects Of Clients’ Tax Enforcement On Financial Statement Auditors: Evidence From A Discontinuity Design, Travis K. Chow, Jeffrey Pittman, Muzhi Wang, Le Zhao
Research Collection School Of Accountancy
We examine the impact of clients’ tax enforcement on financial statement auditors. In a regression discontinuity design, we exploit the firm-registration-date-based application of a new rule that assigns firms to two different tax enforcement regimes. Our analysis implies that auditors exert less effort–evident in lower audit fees and shorter audit report lags–when their clients are monitored by the more stringent tax authority. In results supporting that audit quality improves in this situation despite the fall in auditor effort, we report that clients subject to tougher tax enforcement exhibit a lower incidence of accounting restatements and tax-related restatements. Additionally, we find …
Auditor Switching For Opinion Shopping, And Subsequnt Audit Quality And Audit Fee: Evidence From Post-Sox Period, Jong-Hag Choi, Heesun Chung, Catherine Heyjung Sonu, Yoonseok Zang
Auditor Switching For Opinion Shopping, And Subsequnt Audit Quality And Audit Fee: Evidence From Post-Sox Period, Jong-Hag Choi, Heesun Chung, Catherine Heyjung Sonu, Yoonseok Zang
Research Collection School Of Accountancy
Theory suggests that firms engage in opinion shopping to obtain better audit opinions. However, there is scarce evidence on the economic consequences of the opinion shopping behaviors. In this paper, we examine the effect of auditor switches for opinion shopping on audit quality and audit fees. Using 30,333 firm-year observations over the 2004-2012 period in the U.S., we first document evidence that firms switch their auditors in search for better audit opinions. Next, we find that the audit quality of clients that switch auditors for opinion shopping is significantly lower than that of clients that did not switch auditors or …
The Triangular Relationship Between Audit Committee Characteristics, Audit Inputs, And Financial Reporting Quality, Jae Bum Kim, Benjamin Segal, Dan Segal, Yoonseok Zang
The Triangular Relationship Between Audit Committee Characteristics, Audit Inputs, And Financial Reporting Quality, Jae Bum Kim, Benjamin Segal, Dan Segal, Yoonseok Zang
Research Collection School Of Accountancy
Using the exogenous reforms to audit committees mandated by the Sarbanes-Oxley Act of 2002 and a difference-in-difference approach, we examine the impact of changes in audit committee attributes (financial expertise, size, and independence) on firms’ audit inputs and financial reporting quality. Firms directly affected by the reforms experienced a larger improvement in audit inputs (measured by audit fees and the appointment of an industry specialist auditor) and a larger increase in financial reporting quality (measured by restatements of financial reports) relative to firms that were already compliant. Importantly, we find that the decline in restatements is not related to the …
The Triangular Relationship Between Audit Committee Characteristics, Audit Input And Financial Reporting Quality, Jae Bum Kim, Benjamin Segal, Dan Segal, Yoonseok Zang
The Triangular Relationship Between Audit Committee Characteristics, Audit Input And Financial Reporting Quality, Jae Bum Kim, Benjamin Segal, Dan Segal, Yoonseok Zang
Research Collection School Of Accountancy
Using the reforms to audit committees mandated by the Sarbanes-Oxley Act of 2002 and the difference-in-difference approach, we examine the impact of changes in audit committee attributes (financial expertise, size and independence) on the corporate commitment to audit assurance and on the likelihood of financial statement restatements. Firms that were directly affected by the reforms experienced a greater improvement in audit inputs (measured by audit fees and the appointment of an industry specialist auditor) and a larger decline in financial statements restatements relative to firms that had already been compliant. Importantly, we find that the decline in restatements is not …
The Effect Of Internal Control Weakness Under Section 404 Of The Sarbanes-Oxley Act On Audit Fees, Jong-Hag Choi, Jeong-Bon Kim, Soo Young Kwon, Yoonseok Zang
The Effect Of Internal Control Weakness Under Section 404 Of The Sarbanes-Oxley Act On Audit Fees, Jong-Hag Choi, Jeong-Bon Kim, Soo Young Kwon, Yoonseok Zang
Research Collection School Of Accountancy
In this paper, we investigate the effect of the enactment of the SarbanesOxleyAct (SOX) in 2002 on audit pricing, using a sample of 252 firms that received an “Ineffective” audit opinion and other firms that received cleanaudit opinion on the effectiveness of the internal control over financial reportingunder Section 404 of SOX. Our analyses show the following. First,we find that auditors charge significantly higher audit fees for all firms inthe post-SOX period than in the pre-SOX period. Second, we find that auditors’opinions on the weakness in internal control (WIC) are positively associatedwith audit fees, and that the positive association between …
Audit Fees: To Disclose Or Not To Disclose?, Teng Aun Khoo, Soo Chiat Hwang
Audit Fees: To Disclose Or Not To Disclose?, Teng Aun Khoo, Soo Chiat Hwang
Research Collection School Of Accountancy
The authors argue that the disclosure of audit fees can provide a more level playing field in Singapore, and would also be consistent with the other major capital markets in the world. Auditors' independence is the cornerstone of the auditing profession, because without auditor's independence investors would not be able to rely on the so-called "audited" financial statements. Currently in Singapore, audit-fee disclosure is not mandatory except for banks as stipulated by the Monetary Authority of Singapore (MAS).