| Nama Pengarang | : | - |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 37 - 53 |
| Abstraksi Narasi | : | In this study we expand the audit fee model introduced by Simunic (1980) and extended by Houston et al. (1999) by adding a third factor, nonlitigation risk, which refers to general business risks and/or opportunities that extend beyond litigation risk or the conduct of the audit (e.g., opportunities for future audit and nonaudit revenues, potential damage to the auditor`s reputation from involvement with a client). In an experiment, we ask audit partners and managers to assess various risks and develop an audit plan after reviewing one of four risk-increasing audit scenarios-the discovery of an error, the discovery of a GAAP inconsistency, a client buyout where the audited financial statements are used in the determination of the exchange price, and the loss of a major client customer. We find that, in the error and buyout cases, audit fee increases are explained only by the planned increase in audit investment; in the GAAP inconsistency case, the audit fee increase is explained in part by the planned increase in audit investment, but to a greater by residual litigation risk; in the loss of customer case, the audit fee increase is explained by the planned audit investment, resiual litigation risk, and nonlitigation risk. These results suggest that business risk is comprised of at least three actors (acceptable audit risk, residual litigation risk, and nonlitigation risk), and that auditors are compensated to act as auditors, provide insurance for investor losses, and bear risks associaeted with factors that extend beyond the conduct of the audit. We also discuss how nonlitigation risk can clarify the results of previous research and be used in future research. |
| Nama Pengarang | : | - |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 7 - 20 |
| Abstraksi Narasi | : | This study contributes to the debate on the motives for auditor changes by examining the relationship between client retention and one of the many factors that potentially influence client retention, engagement-level pricing. We find for a sample of public and private audit engagements that the difference between realized realization rates (the ratio of the audit engagements that the standard audit fee) and expected realization rates is positively associated with client retention over a five-year window. Our findings suggest pricing pressure is more than an isolated occurrence and the incumbent auditor`s inability to recover unexpectedly high labor usage is associated with the severing of the auditor-auditee relationship. |
| Nama Pengarang | : | - |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 55 - 75 |
| Abstraksi Narasi | : | This study investigates factors indicating CFO intentions of fraudulent financial reporting. Structural equation modeling is used to analyze survey data obtained from 139 CFOs. We find an extended reasoned action model fits the data well and explains CFO intentions to report fraudulently. More specifically, we find that CEOs of large companies are more likely to report fraudulently in the financial statements and that compensation structure is not a good indicator of CFO intentions to report fraudulently. Informal and formal audit methods for assessing management attitudes towards fraudulent reporting, such as questionnaires and automate decision aids, are recomended since they ofer the best opportunity to improve significantly auditors` ability to predict fraudulent financial reporting. Implications for future research and practice development are considered. |
| Nama Pengarang | : | Thibodeau, Jay C., Richard Cleary, Peter R. Gillet, Nancy Uddin, Chris E. Hogan, Karl E. Hackenbrack, Richard W. Houston, Peters, Michael F., Jamie H. Pratt, Rama, Dasaratha V., Geiger, Marshall A. |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 77 - 81 |
| Abstraksi Narasi | : | At first glance the application of digital analysis using Benford`s Law holds great promise as a fraud detection process. However, a closer look at the underlying statistical assumptions reveals that auditors seeking to use Benford`s Law must be aware of the cost of the potential Type I errors that can occur during the analysis stage. For example, statistical considerations indicate that there is a far greater chance of making a Type I error if the Benford`s Law analysis is completed on a ``digit-by-digit'' basis, we explain the merits of each choice in terms of statistical concepts and practical audit process considerations. |
| Nama Pengarang | : | - |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 37 - 53 |
| Abstraksi Narasi | : | We examine the choice of auditor by 380 incorporated societies in new Zealand. Incorporated societies may choose whether to be audited, and are free to choose an auditor of " any level of quality". We measure audit levels, in order of increasing quality, as : (1) Whether the entity choose to be audited, (2) whether the auditor is qualified or unqualified accountant, (3) whether the qualified accountan is an individual or q chartered accountancy firm, (4) whether the audit firm is large, and (5) whether the large audit firm is a member of the big 5. We test whether variables representing demand for auditing by incorpoirated societies are associated with mechanisms that indicate auditor quality to users. We find that larger entities, and entities with higher salaries as a proportion of revenues and higher debt as aproportion of assets are more likely to be audited: they are also more likely to choose chartered accountancy firms and to choose larger audit firms. entities with a higher proportion of their revenue from members are more likely to choose big 5 aidotors. These results are consistent with DeAngelo`s (1981) and watts and Zimmerman`s (1986) explanations for professional auditing institutes, audit firm size, and firm reputation as surrogates for auditor quality. |
| Nama Pengarang | : | - |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 71 - 88 |
| Abstraksi Narasi | : | Strategic-systems auditing (SSA) approaches require auditors to perform analyses of their clients at two levels (i.e., strategic and business-process levels) when conducting audits (e.g., Bell et.al. 2002; Lemon rt.al. 2000). One advantage of using SSA approaches is that through these analyses, auditors gain a complex systems understanding of the client. This understanding enhances decision making in part by recognising that small actions can have big effects that increase overall business risk (Jacobson 2001; Richmond 2000), This study examines how the two levels of analysis in SSA impact auditor judgements regarding small changes in a business process that can have big (risk-increasing)effects. Specifically, we predict that when strategic-positioning information (contained within the strategic-level analysis) indicates a client is typical of others in its industry, information at the business-process level regarding a small problem in a business process will be weighted less than when the strategic -positioning information indicates the client is a typical. Results support this contention. This behavior may have implications for the effectiveness of SSA approaches under certain conditions. |
| Nama Pengarang | : | - |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 159 - 167 |
| Abstraksi Narasi | : | Thisa paper examines the effects of time budget pressure and risk of misstatement the propensity of auditors to commit reduced audit quality (RAO) acts. Undestanding the different conditions under which time budget presurre can impact on auditors` behavior is important because of the emphasis on meeting budgets in practice. a 2 x 2 x 2 mixed design was used with two between-subjects variables for time budget pressure and risk and a repeated measure for the type of RAQ (accepting doubful audit evidence and truncating a selected sample). The dependent variable was the propensity likelihood of RAQ is lower when the risk of misstatement is higher. However, this effect was observed for only one of the two RAQ acts examined, suggesting that these RAQ acts are not seen to be the same by auditors. Different risk responses conditioned on the type of RAQ may be indicate of a strategic response to use of RAQ under time budget pressure. |
| Nama Pengarang | : | - |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 13 - 35 |
| Abstraksi Narasi | : | This study investigates whether the expertise, independence, and activities of a firm`s audit committee have an effect on the quality of its publicly financial information. In particular, we examine the relationship between audit committee characteristics and the extent of corporate earnings management as measured by the level of income-increasing and income-decreasing abnormal accruals. using two groups of U.S. firms, one with relatively high and one with relatively low levels of abnormal accruals in the year 1996, we find a significant association between earnings management and audit committee governance practices. We fin that aggressive earnings management is negatively associated with the financial and governance expertise of audit committee members, with indicators of independence, and with the presence of a clear mandate defining the responsibilities of the committee. The Association is similar for both income-increasing and income-decreasing with both types of earnings management and do not exhibit an asymmetric loss function similar to that of auditors. |
| Nama Pengarang | : | - |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 131 - 146 |
| Abstraksi Narasi | : | This study examines the relationship between audit committee and board independence and auditor resignations. Independent audit committee and both members, who are concerned about incurring legal liability and harming their reputations, support external auditors in accomplishing their assurance duties. We use a logit model to compare audit committee and board independence between two types of auditor switches: 190 auditor-initiated switches versus 190 matched client-initiated switches during the time period 1996 to 2000. Our result show that audit committee and board of director independence are both negatively associated with the likelihood of an auditor resignation. Our results also show that audit committee independence is positively related to the quality of the firm`s successor auditor. This suggests that independent audit committees also play a mitigating role in reducing the negative consequences associated with an auditor resignation. |
| Nama Pengarang | : | - |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 119 - 130 |
| Abstraksi Narasi | : | There was a significant increase in going-concern opinions in the U.K. during the 1990s despite a strong economy. This paper tests the impact of a new audit report standard versus an enhanced audit procedures standard in explaining this change. We find the increases going-concern modification rate among financially distressed firms is directly associated with the introduction of the less confrontational audit report standard: SAS no. 600. On the other hand, the going-concern procedure standard (SAS no. 130) had no impact on our results. We interpret this finding as highlighting the importance of audit report presentation for standard setters this finding as highlighting the importance of audit report presentation for standard setters when seeking to enhance disclosure. |
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