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Full-Text Articles in Business
The Impact Of Ceo/Cfo Outside Directorships On Auditor Selection And Audit Quality, Jaeyoon Yu, Byungjin Kwak, Myung Seok Park, Yoonseok Zang
The Impact Of Ceo/Cfo Outside Directorships On Auditor Selection And Audit Quality, Jaeyoon Yu, Byungjin Kwak, Myung Seok Park, Yoonseok Zang
Research Collection School Of Accountancy
We examine whether outside directorships of chief executive officer/chief financial officer (CEO/CFO) and resulting network ties to auditors affect auditor selection decisions and subsequent audit quality. The network ties arise when the CEO/CFO of a firm (home firm) serves as an outside director of another firm that hires an auditor (connected auditor). Using a sample of firms that switch auditors in the post-Sarbanes-Oxley Act period, we find that home firms are more likely to appoint connected auditors. We also find that home firms hiring connected auditors experience a significant decline in subsequent audit quality, compared to those hiring …
The Impact Of The Sarbanes-Oxley Act On Clients’ Audit Opinion Shopping Behavior, Jong-Hag Choi, Heesun Chung, Catherine Heyjung Sonu, Yoonseok Zang
The Impact Of The Sarbanes-Oxley Act On Clients’ Audit Opinion Shopping Behavior, Jong-Hag Choi, Heesun Chung, Catherine Heyjung Sonu, Yoonseok Zang
Research Collection School Of Accountancy
This study investigates whether the tendency for audit clients to engage in opinion shopping becomes weaker after the enforcement of the Sarbanes-Oxley Act (SOX). While Lennox (2000) provides evidence that U.K. firms successfully engage in opinion shopping, there is limited evidence on the mitigating effect of SOX on opinion shopping. Using observations collected from the period before and after the enforcement of SOX (year 2001, 2004 and 2005), we find that, for our sample period, firms are likely to switch (retain) their incumbent auditors when the likelihood of receiving a going concern opinion is lower (higher) from a successor auditor, …
The Downside Of The Network Ties Between Ceo/Cfos And Auditors Through External Directorships: Evidence From Auditor Selection And Subsequent Audit Quality, Jaeyoon Yu, Byungjin Kwak, Myung Seok Park, Yoonseok Zang
The Downside Of The Network Ties Between Ceo/Cfos And Auditors Through External Directorships: Evidence From Auditor Selection And Subsequent Audit Quality, Jaeyoon Yu, Byungjin Kwak, Myung Seok Park, Yoonseok Zang
Research Collection School Of Accountancy
This study examines whether the professional ties of Chief Executive Officers/Chief Financial Officers (CEO/CFOs) to auditors through external directorships affect auditor selection and subsequent audit quality. Professional ties to auditors arise when the CEO/CFO of a firm (referred to as the home firm) serves as an outside director of another firm that hires an auditor (a connected auditor). Using a sample of firms with auditor switches over the period 2003-2012, we find that home firms are more likely to appoint connected auditors. Furthermore, utilizing a difference-in-differences approach, we find that home firms appointing connected auditors experience a significant decline in …
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 …
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).