Audit and non-audit fees and capital market perceptions of auditor independence

2009 ◽  
Vol 28 (5) ◽  
pp. 369-385 ◽  
Author(s):  
Aloke (Al) Ghosh ◽  
Sanjay Kallapur ◽  
Doocheol Moon
Keyword(s):  
Capital Market ◽  
Audit Fees ◽  
Auditor Independence ◽  
Market Perceptions

Factors Associated with the Early Adoption of the SEC's Revised Auditor Fee Disclosure Rules

2006 ◽  
Vol 25 (2) ◽  
pp. 41-51 ◽  
Author(s):  
Sharad Asthana ◽  
Jayanthi Krishnan
Keyword(s):  
Audit Fees ◽  
Auditor Independence ◽  
Securities And Exchange Commission ◽  
Factors Associated ◽  
Disclosure Requirements ◽  
Early Adoption ◽  
Disclosure Rules ◽  
Definition Of ◽  
Auditor Fees ◽  
Considerable Concern

Corporate disclosures of auditor fees (beginning in February 2001) caused considerable concern among regulators and investors about auditor independence because they revealed that nonaudit fees were a substantial proportion of total auditor fees. However, in 2003 the Securities and Exchange Commission (SEC) introduced revised disclosure requirements, specifying a broader definition of audit fees, and additional fee categories (SEC 2003). About 31 percent of our sample firms adopted the new rules in advance of the required date. We investigate the pattern of early adoption of the new fee disclosure rules by companies. Our results indicate that companies with greater nonaudit fee ratios during the prior year, companies that could show a greater decline in nonaudit fee ratios due to reclassification under SEC (2003), and companies that had greater audit-related fees after the reclassification were likely to adopt the new rules early. We conjecture that companies that had the most to gain from reclassifying fees—possibly by reducing negative investor perceptions about nonaudit services—adopted the new rules earlier than required.

scholarly journals Factors Influencing Auditor Independence among Listed Companies in Nigeria: Generalized Method of Moments (GMM) Approach

2017 ◽  
Vol 9 (8) ◽  
pp. 191 ◽  
Author(s):  
Mary Kehinde Salawu
Keyword(s):  
Method Of Moments ◽  
Stock Exchange ◽  
Generalized Method Of Moments ◽  
Secondary Data ◽  
Audit Fees ◽  
Listed Companies ◽  
Positive Influence ◽  
Auditor Independence ◽  
Financial Reports ◽  
Factors Influencing

The study examines the factors influencing auditor independence among listed companies in Nigeria. A sample of 65 firms out of the 194 listed on the Nigerian Stock Exchange (NSE) were purposively selected for analysis, these comprise 14 money deposit banks (financial), 1 mortgage bank and 50 non-financial firms. Secondary data were employed for the study and were sourced from the audited financial reports of sampled companies and fact book of the Nigerian Stock Exchange between the periods of 2006 and 2013. Data were analysed using descriptive statistics and Generalised Method of Moments (GMM). Preliminary tests were carried out such as Sargan test, Arellano-Bond Serial Correlation Test among others. The study revealed that Big4, audit tenure, profitability, leverage and inventory with account receivable had negative significant impact, which can impair auditor independence, while size of the firms and loss had positive influence on auditor independence in Nigeria. Also, the square root of the number of subsidiaries was positively related to auditor independence, but not significant and the total number of subsidiaries had positive influence on auditor independence but not significant. These results implied that the two variables can increase the complexity of the audit and, consequently, a rise in audit fees expect in their presence. This will in turn reduce auditor independence. The study therefore recommended that joint audit be adopted and audited tenure be reviewed. The findings of the study would enable management, regulators, investors and other stock market participants to play their unique and important roles in enhancing auditor independence in Nigeria.

scholarly journals PENGARUH TIME PRESSURE, KOMPLEKSITAS TUGAS, DAN AUDIT BERKELANJUTAN TERHADAP INDEPENDENSI AUDITOR DENGAN FEE AUDIT SEBAGAI VARIABEL MODERATING (STUDY EMPIRIS PADA KANTOR AKUNTAN PUBLIK DI SURABAYA)

2018 ◽  
Vol 3 (01) ◽  
Author(s):  
Ulfa Nur Habibah ◽  
Hendy Widiastoeti
Keyword(s):  
Time Pressure ◽  
Task Complexity ◽  
Simple Random Sampling ◽  
Audit Fees ◽  
Auditor Independence ◽  
Partial Least Square ◽  
Least Square ◽  
Simple Random Sample ◽  
Continuous Auditing ◽  
Audit Fee

ABSTRACTThis study aims to test empirically the Effects of Time Pressure, Task Complexity and Sustainable Audit Independence Against Auditor with the Audit Fee as Moderating Variable. Auditor independence has a very important role to the auditor when executing the audit assignment which is to preserve fairness, and no partiality to anyone. The population in this study is the auditor who works at KAP Surabaya consisting of 43 KAP. Sampling is used in a way Simple random sampling (simple random sample). Questionnaires were distributed to respondents as many as 80 and the number of questionnaires that can be analyzed as many as 55. The data analysis technique used in this study is a PLS (Partial Least Square) with SmartPLS application version 2.0 M3. The results of this study indicate that the time pressure significantly affect the independence of the auditor, the audit sustained significantly affect the independence of the auditor, fee audits significantly affect the independence of the auditor, Time pressure is moderated by a fee audit significantly affect the independence of the auditor, the audit sustained moderated by audit fees significantly affect the auditor's independence, while the complexity of the task does not significantly influence the independence of auditors and the complexity of the task to be moderated by the audit fee no significant effect on the independence of auditors. Keywords: time pressure, task complexity, continuous auditing, audit fees, auditor independence

scholarly journals Political connections: a threat to auditor independence?

2015 ◽  
Vol 5 (2) ◽  
pp. 222-246 ◽  
Author(s):  
Effiezal Aswadi Abdul Wahab ◽  
Mazlina Mat Zain ◽  
Rashidah Abdul Rahman
Keyword(s):  
Design Methodology ◽  
Institutional Environment ◽  
Audit Fees ◽  
Auditor Independence ◽  
Political Connections ◽  
Panel Regression ◽  
Data Set ◽  
Content Type ◽  
The Relationship

Purpose – The purpose of this paper is to examine whether political connections further impair auditor independence by investigating the relationship between non-audit fees and audit fees and as to whether political connections moderate such relationship. Design/methodology/approach – This study employs panel regression analysis. The panel data set consists of 379 firm-year observations for three years from year 2001 to 2003. Findings – Based on 379 firm-year observations for the period of 2001-2003, grounded on two proxies of political connections namely politically connected firms and the proportion of Bumiputras directors, the authors find a positive and significant relationship between non-audit fees and audit fees, and the relationship becomes weaker, only for Bumiputra-dominated firms connected firms. Originality/value – This study contributes to the extant literature by examining the role of political connections in the context of auditor independence. In addition, this study is conducted in Malaysia, which provides a unique institutional environment with the existence of political connections that is built on ethnic grounds.

scholarly journals Non-audit fees and auditor independence: Nigerian evidence

2019 ◽  
Vol 34 (8) ◽  
pp. 1029-1049
Author(s):  
Paul Nnamdi Onulaka ◽  
Moade Fawzi Shubita ◽  
Alan Combs
Keyword(s):  
Audit Fees ◽  
Auditor Independence ◽  
Structured Interviews ◽  
Content Type ◽  
Face To Face ◽  
External Auditors ◽  
Fund Managers ◽  
Expectation Gap ◽  
Audit Firms ◽  
Economic Necessity

Purpose This study aims to investigate the extent to which the provision of non-audit services (NAS) by external auditors to audit clients affects auditors’ independence and the audit expectation gap in Nigeria. Design/methodology/approach The study adopts an interpretivist approach. In total, 30 semi-structured, face-to-face interviews were conducted to explore the views expressed by audit partners and pension fund managers in Nigeria; group responses were evaluated and presented separately. After transcribing the interview audio recordings, a thematic data analysis of the two groups’ responses was performed. Findings Interpretation of the interview responses indicates that the provision of NAS by audit firms to their audit clients is regarded by auditors as a matter of economic necessity. Nevertheless, it is also perceived as impeding auditors’ independence and increasing the gap between the auditor and public expectations. Practical implications This study contributes to the debate surrounding the need for an independent body to oversee auditing standard setting distinct from the current practice to enhance transparency. Originality/value A qualitative analysis of the nuanced responses obtained from the semi-structured interviews reveals starkly the perceived economic pressures on auditors to accept non-audit work. Moreover, it endorses the regulation to restrict non-audit work in support of a sustainable fee level for an independent audit.

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