| Nama Pengarang | : | - |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 71-97 |
| Abstraksi Narasi | : | This study examines the association between measures of earnings quality and auditor industry specialization. Prior work has examined the association between auditor brand name and earning quality, using auditor brand name to proxy for audit quality. Recent work has hypothesized that auditor industry specialization also contributes to audit quality. Extending this literature, we compare the absolute level of discretionary accruals (DAC) and earnings response coefficients (ERC) of firms audited by industry specialists with those of firms not audited by industry specialists. We restrict our study to clients of Big 6 (and later Big 5) auditors to control for brand name. Because industry specialization is unobservable, we use multiple proxies for it. After controlling for variables established in prior work to be related to DAC and the ERC, we find clients of industry specialist auditors have lower DAC and higher ERC than clients of nonspecialist auditors. This finding is consistent with clients of industry specialists having higher earnings quality than clients of nonspecialists. |
| Nama Pengarang | : | - |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 121-146 |
| Abstraksi Narasi | : | This study extends the scope of timing research to China`s emerging capital market by examining the effects of audit opinions and earnings surprises on the timeliness of annual earnings announcements, after controlling for firm size, the presence of losses, financial distress, auditor switches, and changes in the Chinese regulatory environment. Based on a sample of listed Chinese firms for 1995-1999, we observe that both audit opinions and earnings surprises have significant effects, as reported in Bamber et al. (1993). We also find a significant effect attributable to the magnitude of negative earnings surprises as shown by Begley and Fischer (1998). In addition, we document a significant interaction effect between audit opinions and earnings surprises. Positive earnings surprises with modified audit opinions are announced significantly later than unqualified negative earnings surprises. |
| Nama Pengarang | : | - |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 33-52 |
| Abstraksi Narasi | : | This paper examines IPO audit fees to assess the use of industry specialization as a differentiation strategy by audit firms. We extend existing theory on the impact of industry specialization on audit fees by incorporating Porter`s (1985) theory of competition and differentiation. We suggest that market share enables audit firms to gain competitive advantages in terms of cost and service. However, the impact of such advantages on fees depends on whether the audit firm has successfully differentiated itself from competitors within client industries. Our results indicate that as audit firm industry market share increases without a differentiation in market share, the audit fee charged for a given IPO decreases. In the context of Porter (1985), this result suggests that the client is able to bargain for a portion of the auditor`s cost savings because the audit firm has not successfully differentiated itself from competitors. In contrast, we show that audit firms that possess significantly higher market shares than their industry competitors earn fee premiums, suggesting that audit firms that have successfully differentiated themselves retain a stronger bargaining position with their clients. |
| Nama Pengarang | : | - |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 53-69 |
| Abstraksi Narasi | : | The SEC and legislators have expressed concerns that independence may be negatively impacted if auditors perform significant nonaudit services for their audit clients, and that providing lucrative services to clients may make it more likely that auditors will ``see things the client`s way.`` Such concerns are particularly salient in the context of issues that involve significant auditor judgment, as in the case of reporting decisions related to going-concern uncertainties for financially stressed clients. In this study we examine the association between the magnitude of audit and nonaudit fees and auditor report modification decisions for financially stressed manufacturing companies. In our analysis we control for financial stress, company size, reporting lag, default status, audit committee effectiveness, and management plans. The results indicate a significant positive association between the magnitude of audit fees and the likelihood of receiving a going-concern modified audit opinion, but we find no significant association between nonaudit fees and audit opinions. Additional analyses also find no sigmificant relationship between the ratio of nonaudit service fees to audit fees and reporting decisions, and indicate that our results are robust across alternative model, variable, and sample specifications. We also control for the potential endogeneity of audit opinions, audit fees, and nonaudit fees, and find the same positive association of audit fees with opinions, but no association between nonaudit fees and audit opinions.Overall, we find no evidence of a significant adverse effect of nonaudit fees on auditor reporting judgments for our sample of distressed companies. |
| Nama Pengarang | : | - |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 189-205 |
| Abstraksi Narasi | : | This study reports the results of an experiment that investigates the effects of financial-report timing, EPS proximity to analyst forecast, and external auditor argument consistency on audit committee members` support for a proposed audit adjustment. We use source credibility theory to predict greater support for the audit adjustment when the financial report is at year-end rather than ar interim, when unadjusted EPS is above rather than below forecast, and when the auditor consistently argues for adjustment rather than agrees with management`s preference to avoid adjustment. One hundred thirty-one audit committee members participated in a between-subjects experiment. Consistent with theory, the participants were more likely to recommend adjustment for annual statements and for adjustments that the auditor consistently supported. Two significant interactions indicate that the effect of report timing holds only in the under forecast and inconsistent auditor conditions. Finally, audit committee members who were CPAs were less likely to recommend adjustment. We discuss implications and future research directions. |
| Nama Pengarang | : | - |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 253-263 |
| Abstraksi Narasi | : | Recent actions related to audit committees by the Securities and Exchange Commission (SEC) reflect the Commission`s belief that the composition of audit committees can influence the monitoring of auditor-client relationships, and thereby influence shareholder perceptions about auditor independence and overall audit performance. The SEC has also suggested that shareholder perceptions about the auditor will influence shareholder actions, including voting on ratifying the auditor selected by management. This paper examines the association between audit committee composition and shareholder actions, using auditor ratification data from 199 companies. The results indicate that, in companies with high nonaudit fee ratios, shareholders are less likely to vote against auditor ratification if the audit committee has solely independent directors. These results provide empirical support to the assertions of the SEC and others that audit committee composition can impact investors` perceptions and actions. However, the low percent of votes against auditor ratification indicates that the results must be interpreted with caution. |
| Nama Pengarang | : | - |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 171-187 |
| Abstraksi Narasi | : | A recent development in the assurance services profession is the emergence of engagements on a broad range of subject matter that are designed to provide a moderate level of assurance. A significant issue for the profession is how to convey to users the limited extent of the assurance provided by such engagements. This study identifies four main categories of moderate assurance reporting forms (opinion on procedures, negative assurance, positive assurance, positive assurance with a limitations paragraph) being used in pratice worldwide for providing assurance on environmental and sustainability reports. It examines whether these four reporting forms convey a lower level of assurance than that provided by a traditional high assurance report, and whether these reporting formats lead to significantly different levels of assurance perceived by a proup of 792 shareholders. The findings indicate that users perceive that these moderate assurance reporting formats generally provide a lower level of assurance than that provided by a high assurance report. However, one significant difference was found between the four types of moderate assurance reports, with the opinion on procedures format providing higher assurance than the positive assurance with a limitations paragraph format. Implications for policy makers in their deliberations on assurance report wording in relation to moderate assurance engagements are considered. |
| Nama Pengarang | : | - |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 219-235 |
| Abstraksi Narasi | : | In order to improve auditor judgments, it is first necessary to understand and evaluate what successful auditors do differently than those who are less successful. This study uses a computerized research instrument to examine in a single experiment the hypothesis generation, information search, hypothesis evaluation, and final judgment stages of the analytical procedures process. The inclusion of a criterion variable and the ability to search of analytical procedures auditors make less-than-optimal judgments. Of the 82 participants, 24 selected the correct cause, 19 never generated the correct cause as a hypothesis, and 39 generated the correct cause as a hypothesis but ended up not selecting it. The incorrect participant were divided into two categories: those who incorrectly selected the inherited hypothesis and those who incorrectly selected another self-generated non-error as the cause. The former group showed deficiencies in both information search and hypothesis evaluation compared to the correct group. the second incorrect group had similar information search patterns to the correct participants but had inferior hypothesis evaluation. These findings therefore lend support to the suggestion by Asare and Wright (2003) that not only is hypothesis generation important, but also information search and hypothesis evaluation are important. |
| Nama Pengarang | : | - |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 281-295 |
| Abstraksi Narasi | : | This study draws on the theoretical framework of Hofstede`s model to examine the impact of different cultural dimensions on audit-detected accounting errors. Based on the accounting errors detected in 80 foreign enterprises of different cultures operating in China, we test the direct effect of the cultural dimensions, power distance and individualism, on the magnitude of accounting errors. The results indicate that power distance and individualism have significant explanatory power in describing the differences in the relative magnitude of errors. Centralization of power in a few individuals, management override of controls, and less competent personnel are important attributes of a large power distance enterprise that contribute to large errors. Enterprises of an individualist culture, which are characterized by higher personnel turnover and more reliance on accounting numbers for individual performance evaluation, are found to have larger errors. These results should be useful for auditors in assessing the likelihood of material errors from a cultural perspective. |
| Nama Pengarang | : | Steven M. Glover...[et al.], K. Hung Chan, Phyllis Lai Lan Mo, Kenny Z. Lin, Ken T. Trotman, Wendy J. Green, Simnett, Roger , Mahreen Hasan, Peter J. Roebuck, Rama, Dasaratha V., Hermanson, Dana R. , Richard W. Houston, DeZoort, F. Todd, Rama, Dasaratha V., Geiger, Marshall A., Michael S. Wilkins, Brian W. Mayhew, In-Mu G. Haw, et al., Steven Balsam, Krishnan, Jagan, Joon S. Yang, Hans Blokdijk, et al., Jeff L. Payne, Jensen, Kevan L. , Abbott, Lawrence J. [et al.], Robert A. Leitch, Yining Chen, C. Janie Chang, Nen-Chen Richard Hwang, Joseph J. Schultz, Jr, Ed O''Donnell |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 237-251 |
| Abstraksi Narasi | : | This study is a post-SAS No.82 replication of Zimbelman (1997) (hereafter Z97), which examined the effect of a separate and explicit fraud-risk assessment as later required by SAS No. 82. Z97 found weak evidence that this requirement would impact auditors` planning judgments. However, because Z97 was conducted befora SAS No. 82 was issued, that study was unable to capture the full effect of SAS No. 82 on the audit environment (e.g., related guidance and training, audit policy, and implementation experience). In this study, we compare pre- and post-SAS No. 82 planning judgments and find that post-SAS No. 82 judgments are more sensitive to fraud risk factors. Specifically, we find that post-SAS No. 82 partcipants are more aware of the meed to modify audit plans and are more likely to increase the extent of their audit tests in response to increased fraud risk when compared with the pre-SAS No. 82 participants in Z97. However, we do not find evidence that auditors modify the nature of their planned tests in response to fraud risk either before or after SAS No. 82. |
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