The Association Between Auditor Litigation And Abnormal Accruals PDF Download
Are you looking for read ebook online? Search for your book and save it on your Kindle device, PC, phones or tablets. Download The Association Between Auditor Litigation And Abnormal Accruals PDF full book. Access full book title The Association Between Auditor Litigation And Abnormal Accruals.
| Author | : William G. Heninger |
| Publisher | : |
| Total Pages | : 26 |
| Release | : 2003 |
| Genre | : |
| ISBN | : |
Download The Association between Auditor Litigation and Abnormal Accruals Book in PDF, ePub and Kindle
Concern that earnings management erodes the quality of financial reporting has prompted the Securities and Exchange Commission to question the role of the external auditor. To help address this concern, this study examines the relation between earnings management and auditor litigation. While prior research on the relation between auditor litigation and total accruals has yielded inconclusive results, I find that the risk of auditor litigation is positively associated with a sharper measure of earnings management, abnormal accruals. Using a larger and more recent sample, this study provides evidence that the probability of auditor litigation increases as clients report more positive (income-increasing) abnormal accruals. This result holds in: (1) univariate analyses, (2) logit analyses that also control for auditor size, client importance to the auditor, length of the auditor-client relationship, client industry, client financial condition, client size, and client growth, and in (3) the subsample of lawsuits alleging wrongdoing in the more recent time period (1984 - 1998).
| Author | : Marty Butler |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2004 |
| Genre | : |
| ISBN | : |
Download An Empirical Analysis of Auditor Reporting and Its Association with Abnormal Accruals Book in PDF, ePub and Kindle
In this paper, we introduce a Web-based sampling methodology that we use to obtain and content analyze a large sample of modified audit opinions. Based on this analysis, we re-examine whether certain modified audit opinions are associated with abnormal accruals, as a proxy for earnings management. We find that the documented relation between modified opinions and abnormal accruals rests with companies that have going-concern opinions because such companies have extremely negative accruals. The explanation for these negative accruals is likely severe financial distress since we find that, ceteris paribus, their magnitude is not significantly different from that of a sample of similarly-distressed control firms. Overall, we find no evidence to support inferences in previous research that firms receiving modified audit opinions manage earnings more than those receiving clean audit opinions.
| Author | : Robert H. Herz |
| Publisher | : Wiley |
| Total Pages | : 1344 |
| Release | : 1997-07-15 |
| Genre | : Business & Economics |
| ISBN | : 9780471179634 |
Download The Coopers & Lybrand SEC Manual Book in PDF, ePub and Kindle
The most authoritative source available on SEC rules and regulations In this comprehensive manual, SEC staff members and specialists from Coopers & Lybrand L.L.P. with extensive experience in dealing with registrant issues provide interpretive guidance on the latest SEC regulations. They review the formal and informal requirements that are often encountered in SEC practice and recommend approaches for compliance. The Coopers & Lybrand SEC Manual, Seventh Edition provides a general understanding of SEC accounting practices, enables users to identify more easily the official sources of SEC rules and regulations, and addresses all of the most frequently asked questions. This fully updated Seventh Edition contains several new and important features, including a section on EDGAR; an expanded section on business combinations, including poolings of interests; and guidance on the financial statement requirements for acquired companies. Other highlights include: Organization of the SEC The role of the accountant in the registration process Small-business issues rules Preparation guidelines for most frequently used registration forms Coverage of the most significant accounting issues affecting registrants Foreign registrant reporting requirements For CFOs, controllers, CPAs, investment bankers, securities analysts, and attorneys, The Coopers & Lybrand SEC Manual, Seventh Edition provides effective, hands-on guidance and interpretation.
| Author | : Krishnagopal Menon |
| Publisher | : |
| Total Pages | : 0 |
| Release | : 2008 |
| Genre | : |
| ISBN | : |
Download Former Audit Partners and Abnormal Accruals Book in PDF, ePub and Kindle
Audit clients often employ a former partner of their present auditor as an officer or a director. This "revolving door" practice presents a potential threat to auditor independence. Using the Jones (1991) model to calculate abnormal accruals for firms in 1998 and 1999, we find that firms employing former partners as officers or directors report larger signed and unsigned abnormal accruals than other firms, after controlling for other factors that plausibly affect abnormal accruals. To ensure that the results are not driven by performance characteristics of the former partner firms, we construct a performance-matched control sample and obtain consistent results. We also observe a disproportionately higher (lower) proportion of former partner firms than expected just meeting (missing) analysts' earnings forecasts.
| Author | : Stephen R. Moehrle |
| Publisher | : Emerald Group Publishing |
| Total Pages | : 298 |
| Release | : 2013-06-25 |
| Genre | : Business & Economics |
| ISBN | : 1781907641 |
Download Understanding Accounting Academic Research Book in PDF, ePub and Kindle
Accounting scandals such as Enron and WorldCom ushered in several regulatory overhauls including Sarbanes-Oxley. This monograph summarizes and synthesize a decade of academic research to develop an evolving dominant explanation around these myriad changes.
| Author | : Jagan Krishnan |
| Publisher | : |
| Total Pages | : 44 |
| Release | : 2014 |
| Genre | : |
| ISBN | : |
Download Auditor Litigation Risk and Corporate Disclosure of Quarterly Review Report Book in PDF, ePub and Kindle
The Securities and Exchange Commission (SEC) recently made timely reviews of quarterly financial statements mandatory for all registrants. The objective is to improve corporate quarterly reporting. However, formal review reports are not required to be included in 10-Q filings, and may not even be issued by auditors. A priori, one would expect these reports to be useful to investors if they imply added auditor diligence or if they contain modifications to the standard report. We find that only 5.7% of the companies in our sample attached the auditor's review report in their 10-Q filings. Also the majority of these reports are clean, suggesting that clients may not be disclosing the reports when they are modified. After controlling for factors such as auditor type, agency costs, capital market transactions, and company size, we find a significant negative association between auditor's litigation risk and disclosure of a review report. In addition, we find that the disclosure of a review report is associated with auditor type and company size.
| Author | : John W. Kensinger |
| Publisher | : Emerald Group Publishing |
| Total Pages | : 200 |
| Release | : 2013-07-10 |
| Genre | : Business & Economics |
| ISBN | : 1781907595 |
Download Research in Finance Book in PDF, ePub and Kindle
The theme of Research in Finance vol. 29 is "Dealing with Crisis and Regulation", showcasing an international spread of chapters such as the European financial crisis and the study of audit qualifications for accounting firms in Spain. The international aspect of the volume then shifts to business strategies for competition and finally to regulat
| Author | : David Hay |
| Publisher | : Routledge |
| Total Pages | : 387 |
| Release | : 2014-09-15 |
| Genre | : Business & Economics |
| ISBN | : 1136210350 |
Download The Routledge Companion to Auditing Book in PDF, ePub and Kindle
Auditing has been a subject of some controversy, and there have been repeated attempts at reforming its practice globally. This comprehensive companion surveys the state of the discipline, including emerging and cutting-edge trends. It covers the most important and controversial issues, including auditing ethics, auditor independence, social and environmental accounting as well as the future of the field. This handbook is vital reading for legislators, regulators, professionals, commentators, students and researchers involved with auditing and accounting. The collection will also prove an ideal starting place for researchers from other fields looking to break into this vital subject.
| Author | : Dana Porter Garner |
| Publisher | : |
| Total Pages | : |
| Release | : 2008 |
| Genre | : |
| ISBN | : |
Download A Question of Ambiguity, Risk, and Trust Book in PDF, ePub and Kindle
This research study investigates the relationship between ambiguity, litigation risk, and auditor decision-making. In addition, this study investigates how auditor trust of his or her client may change these relationships. It is important to investigate the relationships of ambiguity, litigation risk, and client trust to auditor decision-making because auditors face these factors on a regular basis. This research uses a 2x2 experiment to investigate auditor reaction to ambiguity and litigation risk. The first factor, ambiguity is operationalized as auditor reaction to potential real transaction earnings management (low ambiguity) and potential accrual transaction earnings management (high ambiguity). The second factor, litigation risk is operationalized through an income increasing (high) or income decreasing (low) earnings management attempt. Auditors were given company background information, selected account information, and comparative financial statements and then asked to state the likelihood of material misstatement in the financial statements as a whole and the sales, selling and marketing expenses, research and development expenses, and general and administrative expenses individual accounts. The ambiguity manipulation was imbedded in the description of the research and development account while the litigation risk factor was imbedded in the comparative financial statements. The findings indicate that the subjects reported a relatively high likelihood of material misstatement of research and development expenses regardless of the earnings management method. The findings further indicate that when a real earnings management transaction was present, auditors rated the likelihood of material misstatement in sales and the financial statements as a whole higher than when an accrual earnings management transaction is present. Additionally, when the subject group is limited to individuals working for Big-4 and National non Big-4 firms the auditors assessed the likelihood of material misstatement in the financial statements as a whole, sales, selling and marketing expenses, and general and administrative expenses significantly higher when a real earnings management transaction is present than when an accrual earnings management transaction is present. The lawsuit risk factor was not found to be significant in any of the primary analyses.
| Author | : Cory A. Cassell |
| Publisher | : |
| Total Pages | : |
| Release | : 2017 |
| Genre | : |
| ISBN | : |
Download Auditor Litigation Risk and the Number of Institutional Investors Book in PDF, ePub and Kindle
We investigate whether auditors are sensitive to litigation risk related specifically to having greater numbers of institutional investors that hold the common stock of a given client. Our findings suggest that audit fees are higher when the number of institutional investors holding stock in the company is greater. Additional tests corroborate our inference that the association between audit fees and the number of institutional investors is related to litigation risk. The importance of improving our understanding of auditors' sensitivity to factors that increase litigation exposure is highlighted by the number and magnitude of lawsuits filed against auditors relating to the audits of public clients.
