| Nama Pengarang | : | - |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 197-207 |
| Abstraksi Narasi | : | This study examines determinants of audit committee appointment by comparing characteristics of 262 nonexecutive directors appointed to corporate audit committees between 1995 and 1998 with characteristics of 262 nonexecutive, age-matched control directors. The likelihood of audit committee appoinment is found to increase with the degree of outside director independence, and decrease with compensation committee membership, other committee memberships, and the length of board tenure. Importantly, audit committee appoinments are unrelated to the amount of stock owned by directors and the number of other directorship posts they hold. Together, these results highlight several director attributes beyond affiliation that could be important in guiding director decisions and suggest the need for further research toward understanding the quality of audit committee appoinments. |
| Nama Pengarang | : | - |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 115-136 |
| Abstraksi Narasi | : | The audit fees literature contains little by way of systematic evidence on long-term trends in audit fees. This study analyzes trends in audit fees from 1980 through 1997, adjusting for changes in client size, complexity, and risk. The sample is restricted to clients of Big 6 firms that voluntarily disclosed audit fees in the period 1980-1997. Evidence is found that audit fees increased in the 1980s but stayed flat in the 1990s. Most important, a significant increase is noted in 1988, the year in which the Auditing Standards Board issued the ``expectation gap`` standards. These results hold even after controlling for wage increases in accounting firms, suggesting an expansion of auditing effort. There is no evidence that auditors obtain any price premium from industry specialization. The 1989 Big 8 mergers appear to have had a short-term, but not long-term, effect on fees. Finally, the magnitude of the audit fee model coefficient for account receivable and inventory has declined over the period, presumably due to productivity improvements. |
| Nama Pengarang | : | - |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 29-43 |
| Abstraksi Narasi | : | The AICPA SEC Practice Section (SECPS) notification rule requires a member firm to notify its former client and the Chief Accountant of the SEC in writing within five business days of the date it determines the client-auditor relationship has ended. The rule is unique because it was developed and is enforced by a private organization (the AICPA) to assist a public organization (the SEC) in fulfilling its charge of ensuring full and timely disclosure. An SECPS educational effort to make members aware of their notification responsibilities recently ended. Our paper evaluates the effectiveness of the SECPS educational effort and the SECPS notification letter. It shows that registrant as well as auditor compliance and timeliness increased during the time the notification rule has been in effect, and that the improved registrant performance is likely due in part to improved auditor performance. One implication of our study is that a disclosure requirement auditors impose upon themselves can be effective in helping the SEC monitor client behavior. |
| Nama Pengarang | : | - |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 13-28 |
| Abstraksi Narasi | : | The purpose of this paper is to report the results of a study examining whether auditors` going-concern reports are associated with management plans as directed in SAS No. 59. Proxies for management plan information are taken from management`s discussion and analysis (MD&A), the 10-K, or the annual report. The paper extends work by Mutchler (1985) and Chen and Church (1992) by modeling and testing the association between the auditors` going-concern report and three types of management plan disclosures. After controlling for financial condition, size,default status, and the propensity to voluntarily disclose information, the results of the study indicate that auditors` going-concern reporting decisions are strongly linked to publicly available mitigating information relating to certain management plans. In particular, plans to issue equity and to borrow additional funds exerted the strongest association with the issuance of an unqualified opinion. |
| Nama Pengarang | : | - |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 65-80 |
| Abstraksi Narasi | : | This study investigates internal auditors` consideration of fraudulent financial reporting as an explanation for an unexpected difference in operating income. We examine whether such consideration is affected by the direction of the difference, the use of earnings-based bonus plans, and the restrictiveness of debt covenants. We conduct an experiment in which 127 internal auditors list potential explanations for the unexpected difference. We find that these factors affect internal auditors` consideration of fraudulent financial reporting. Internal auditors list a larger proportion of explanations involving fraud (1) when income is greater than expected, and (2) when debt covenants are restrictive, conditioned on income being greater than expected. We also find that internal auditors assign a higher likelihood of fraud when (1) income is greater than expected, and (2) when an earnings-based bonus plan is used and debt covenants are restrictive. The practical implication is that specific factors can affect internal auditors` consideration of fraudulent financial reporting and potentially may impact audit plans. |
| Nama Pengarang | : | - |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 97-114 |
| Abstraksi Narasi | : | This paper investigates the role of outside members of the board of directors in the choice of external auditor for property-liability insurance companies. Consistent with our hypothesis that we derive from theories of both corporate governance and audit quality, we find that the likelihood of an insurer employing a brand name auditor that specializes in the insurance industry is increasing in the percentage of the members of the board of directors that are considered outsiders. However, we do not find a significant association between board composition and the choice of using a non specialist brand name (Big 6) auditor and a nonbrand name auditor, suggesting specialization is considered to be important, but not brand name in this setting. |
| Nama Pengarang | : | - |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 187-195 |
| Abstraksi Narasi | : | The Private Securities Litigation Reform Act (Reform Act) was enacted as law in 1995 and represents a major victory for the public accounting profession. Since audit reporting for publicly traded companies that enter bankruptcy continues to be of interest to legislators and the public, the Reform Act also includes audit reporting requirements regarding the auditor`s assessments of a company`s ability to continue as a going concern. This study examines the potential impact of the Reform Act on auditor reporting by examining audit reports for 383 bankrupt companies during the 1991-1998 period. The results indicate that, after controlling for financial stress, company size, default status, audit reporting lag and bankruptcy filing lag, auditors were less likely to have issued prior going-concern modified audit reports for bankrupt companies after the Reform Act. |
| Nama Pengarang | : | - |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 81-96 |
| Abstraksi Narasi | : | The American Institute of Certified Public Accountants has recently set forth significant revisions in its nonstatistical audit sample-size decision aid (AICPA 1999). In a controlled setting involving 149 experienced auditors, we test the effects of the new guidance on auditors` sample-size judgments, extending Kachelmeier and Messier`s (1990) (KM) investigation of a previous AICPA (1983) decision aid. We find that the current decision aid results in significantly smaller sample sizes than the previous aid. Further, auditors continue to ``work backward`` in their choice of decision aid inputs, resulting in sample sizes that are more intuitively acceptable. An optional supplement worksheet added to the AICPA`s guidance to assist the auditor in specifying tolerable misstatement generates a marginal increase in sample sizes, but does not eliminate the working-backward phenomenon. However, the supplemental worksheed significantly reduces sample size variability. Additional findings update the conclusions in KM by showing that the excess of decision-aided sample sizes over intuitive sample sizes in their study no longer applies. A final extension addresses a limitation in KM by showing that sample-size judgments are not sensitive to the variation of population size as a separate treatment factor. Overall, this study directs focus to an improved understanding of nonstatistical sampling judgments, which are of increasing importance in the contemporary audit environment. |
| Nama Pengarang | : | - |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 45-63 |
| Abstraksi Narasi | : | An AICPA ethics ruling prohibits auditors from considering employment with a client during the audit engagement in order to minimize the concerns that financial statement users may have regarding the auditor`s independence, in fact or appearance. The objective of this study is to examine auditors` reporting intentions when it is discovered that another auditor is considering employment with the client and has failed to comply with the ethics ruling. We test a model that predicts that auditors` reporting intentions will be influenced by their perceptions of the seriousness of the act, the personal costs of reporting, their responsibility for reporting, and their commitment to the accounting profession. The results indicate that auditors` reporting intentions are stronger when personal costs of reporting are perceived to be lower or personal responsibility for reporting is perceived to be higher. Implications of the findings for audit practice are discussed. |
| Nama Pengarang | : | Knechel, W. Robert, Jeff L. Payne, Steven E. Kaplan, Stacey M. Whitecotton, Kachelmeier, Steven J., Messier, William F., Jensen, Kevan L. , Geiger, Marshall A., Mark S. Beasley, Kathy R. Petroni, Church, Bryan K., McMillan, Jeffrey J. , Arnold Schneider, Behn, Bruce K. , Steven E. Kaplan, Kip R. Krumwiede, Michael L. Ettredge, David B. Smith, Mary S. Stone, Williams, David D., Menon, Krishnagopal, Nikos Vafeas, William F. Wright, Thomas W. Hall, et al., Engle, Terry J. |
| Nama Majalah/Jurnal | : | Auditing: A Journal Of Practice and Theory |
| Volume / Nomor Edisi | : | - |
| Nomor Halaman | : | 137-146 |
| Abstraksi Narasi | : | The process for providing accounting information to the public has not changed much in the last century even though the extent of disclosure has increased significantly. Sundem et al. (1996) suggest that the primary benefit of audited financial statements may not be decision usefulness but the discipline imposed by timely confirmation of previously available information. In general, the value of information from the audited financial statement will decline as the audit report lag (the time period between a company`s fiscal year end the date of the audit report) increases since competitively oriented users may obtain substitute sources of information. Furthermore, the literature on earnings quality and earnings management suggests that unexpected reporting delays may be associated with lower quality information. The purpose of this paper is to extend our understanding about the determinants of audit report lag using a proprietary database containing 226 audit engagements from an international public accounting firm. We examine three previously uninvestigated audit firm factors that potentially influence audit report lag and are controllable by the auditor: (1) incremental audit effort (e.g., hours), (2) the resource allocation of audit team effort measured by rank (partner, manager or staff), and (3) the provision of nonaudit services (MAS and tax). The results indicate that incremental audit effort, the presence of contentious tax issues, and the use of less experienced audit staff are positively correlated with audit report lag. Further, audit report lag is decreased by the potential synergistic relationship between MAS and audit services. |
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