Former Audit Partners And Abnormal Accruals PDF Download
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| 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 | : Kim Ittonen |
| Publisher | : |
| Total Pages | : 52 |
| Release | : 2014 |
| Genre | : |
| ISBN | : |
Download Audit Partner Public-Client Specialization and Client Abnormal Accruals Book in PDF, ePub and Kindle
We examine the association of Big 4 audit partners' public-client specialization with client companies' audit quality. Using a sample of NASDAQ OMX companies in Finland, we identify the audit partner assigned to each public-client engagement. We expect that partners with greater public-client specialization provide higher quality auditing, since they have likely developed deep domain-specific knowledge and a keen sense of the litigation and reputational risks posed by public clients. In addition, the willingness to resist client pressure likely increases with the number of public clients in the partner's portfolio because dependence on any one client diminishes, which should help to ensure audit quality. The results show that public-client specialization is negatively associated with abnormal accruals, and this result is attributable to audit partners with three to six public clients. The results of supplemental tests imply that public-client specialization is more important when general auditing experience is lower. Further, the results reveal that in our setting of high-tax and high alignment between financial reporting and tax reporting, greater public-client specialization is particularly associated with smaller income-decreasing abnormal accruals, suggesting that auditors with greater public-client specialization likely recognize the downside reputational implications and achieve audit quality by discouraging tax avoidance.
| 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 | : Wuchun Chi |
| Publisher | : |
| Total Pages | : 44 |
| Release | : 2014 |
| Genre | : |
| ISBN | : |
Download Client Importance and Audit Partner Independence Book in PDF, ePub and Kindle
We use data from Taiwan where audit partners are required to sign audit reports to examine whether audit partners compromise their independence for economically important clients. Uniquely, we include both listed and unlisted clients in audit partners' client portfolios and separately study these clients for Big N and non-Big N auditors. We employ multiple proxies for auditor independence, including various abnormal accruals measures, the propensity of audit partners to issue modified audit opinions, and the probability that clients meet or just beat earnings targets. We fail to find evidence that Big N audit partners compromise their independence for economically important clients; however, we find such evidence for non-Big N auditors. Our results are robust to a battery of sensitivity analyses. While our inferences are limited to the Taiwanese capital market, our study may be of interest to market participants and regulators in other well developed capital markets.
| 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 | : Tomomi Takada |
| Publisher | : |
| Total Pages | : 42 |
| Release | : 2010 |
| Genre | : |
| ISBN | : |
Download Auditor Conservatism and Abnormal Accruals Book in PDF, ePub and Kindle
| Author | : Vicky Arnold |
| Publisher | : Emerald Group Publishing |
| Total Pages | : 231 |
| Release | : 2010-07-02 |
| Genre | : Business & Economics |
| ISBN | : 0857241370 |
Download Advances in Accounting Behavioral Research Book in PDF, ePub and Kindle
Focuses on the social context that influences accounting as well as the means for supporting information production and dissemination, that is, technology. This title includes studies that examine both the short-term implications of technology use on individuals and the long-term implications of technology on organizational evolution.
| Author | : Jerry L. Turner |
| Publisher | : |
| Total Pages | : 1 |
| Release | : 2008 |
| Genre | : |
| ISBN | : |
Download Does Increased Audit Partner Tenure Reduce Audit Quality? Book in PDF, ePub and Kindle
The Sarbanes-Oxley Act of 2002 requires the lead audit or coordinating partner and the reviewing partner to rotate off the audit every five years so the engagement can be viewed quot;with fresh and skeptical eyes.quot; Using data obtained from actual audits by multiple U.S. offices of three large international audit firms, we examine whether there is a relationship between evidence of reduced audit quality, measured by estimated discretionary accruals, and audit partner tenure with a specific client. We find that estimated discretionary accruals are significantly and negatively associated with the lead audit partner's tenure with a specific client. Thus, audit quality appears to increase with increased partner tenure. After controlling for client size and engagement risk, we find audit partner tenure significantly and negatively associated with estimated discretionary accruals only for small clients with partner tenure of greater than seven years, regardless of risk level. We also find that tenure is not significantly associated with estimated discretionary accruals for large clients. This suggests that as partner tenure increases, auditors of small client firms become less willing to accept more aggressive financial statement assertions by managers, and that partner tenure does not affect audit quality for large clients or for shorter-tenure smaller clients. Our results relating to audit partner tenure are consistent with the conclusions about audit firm tenure by Geiger and Raghunandan (2002); Johnson, Khurana, and Reynolds (2002);Myers, Myers, and Omer (2003); and Nagy (2005) and extend their findings by focusing on individual audit partners rather than on audit firms.
| Author | : Hye Seung (Grace) Lee |
| Publisher | : |
| Total Pages | : 54 |
| Release | : 2018 |
| Genre | : |
| ISBN | : |
Download Audit Partner Assignments and Audit Quality in the United States Book in PDF, ePub and Kindle
This paper examines the demand and supply side factors associated with audit partner selection and assignment in the United States. First, we examine whether audit partner gender and experience are associated with board and management gender and experience. Second, we investigate whether engagement audit quality varies with audit partner gender and experience, controlling for selection effects. The results indicate that companies with more gender-diverse boards of directors and top management teams are more likely to have a female lead audit partner. In addition, the experience of the client's board is positively associated with the experience of the lead audit partner. In terms of audit quality, we find that higher audit fees are positively associated with female and more experienced audit partners. The results also provide weak evidence that audit partner gender is associated with audit quality as measured by abnormal accruals and restatements. We do not find an association between partner experience and audit quality. Our results shed light on the important role that partner characteristics play in the demand and supply side of audit quality. Partner characteristics also have implications for future research on the audit assignment process in the U.S., particularly in light of the new availability of audit partner identities in the PCAOB Form AP filings.
| Author | : Mai Dao |
| Publisher | : |
| Total Pages | : |
| Release | : 2019 |
| Genre | : |
| ISBN | : |
Download Impact of the Disclosure of Audit Engagement Partners on Audit Quality Book in PDF, ePub and Kindle
The debate concerning the recent regulation in the United States mandating accounting firms to disclose engagement partners' identity is ongoing. We examine the impact of the Public Company Accounting Oversight Board's (PCAOB) requirement of disclosing engagement partners' names on Form AP on the quality of audit engagements. Using two measures of audit quality (abnormal accruals and the probability of detecting material weaknesses in internal control), we find that disclosing engagement partners' names is associated with a lower level of abnormal accruals and a higher probability of accounting firms detecting material weaknesses in internal control. Our study extends the contemporary research on the disclosure of engagement partners' identification by providing additional evidence to the literature on this issue in the U.S. setting. Our study also provides evidence supporting the PCAOB's perception that this disclosure leads to higher audit quality.
