The Effects of Non-audit Services on Audit Quality, Audit Fee, and Audit Hour with Controlling for Endogeneity

2016 ◽  
Vol 45 (2) ◽  
pp. 365
Author(s):  
Edward Kim ◽  
Jee In Jang ◽  
Joon hei Cheung
Keyword(s):  
Audit Quality ◽  
Quality Audit ◽  
Audit Fee ◽  
Non Audit Services

scholarly journals Audit Fee Research on Issues Related to Ethics

2017 ◽  
Vol 11 (2) ◽  
pp. A1-A22 ◽  
Author(s):  
David C. Hay
Keyword(s):  
Audit Quality ◽  
Ethical Issues ◽  
Audit Fees ◽  
Preliminary Evidence ◽  
The Body ◽  
International Ethics ◽  
Ethical Problems ◽  
Audit Fee ◽  
Risk Areas ◽  
Non Audit Services

SUMMARY Audit fees are related to important ethical issues for auditors. There has been increasing research on audit fees recently, including research on potential ethical risks regarding audit fees, which helps to illuminate some of these professional issues. The International Ethics Standards Board for Accountants (IESBA) is very interested in this area and asked me to prepare a paper reviewing the relevant research. This summary reviews research that became available from 2006 to 2016 on four issues related to audit fees—fee level, dependence, non-audit fees, and firms that have a significant non-audit services business. Examining the research shows consistent evidence about two issues, namely that audit fees for new engagements are lower and that non-audit services affect independence in appearance. There are two further issues about which there is some concern. First, there are occasional studies reporting evidence that non-audit services provided by an auditor are associated with a loss of independence indicated by lower audit quality, even though most research does not support this conclusion. Second, there has been recent concern about growth in non-audit services to non-audit clients and there is some preliminary evidence that audit quality is lower in firms that have more extensive non-audit businesses. In general, although audit fee research does not convey a message that there are widespread ethical problems, the body of research shows that there are some risk areas.

Investigating the impact of audit features on money laundering

2020 ◽  
Vol 23 (4) ◽  
pp. 913-930
Author(s):  
Shaban Mohammadi ◽  
Nader Naghshbandi ◽  
Zahra Moridahmadibezdi
Keyword(s):  
Money Laundering ◽  
Audit Quality ◽  
Screening Method ◽  
Audit Fees ◽  
Statistical Population ◽  
Content Type ◽  
Quality Audit ◽  
Auditor Tenure ◽  
Audit Fee ◽  
The Impact

Purpose The purpose of the present study is to investigate the impact of audit features, including audit quality, audit fees and auditor tenure on money laundering in Iranian stock companies. Design/methodology/approach This research is descriptive-correlational and applied in terms of purpose. To evaluate the audit features, variables including audit quality, audit fee and auditor tenure were used. The statistical population of this study includes all companies listed in Tehran Stock Exchange and the research period from 2012 to 2018. A sample of 150 companies was selected by the screening method. In this study, logistic regression and Eviews 10 software were used for data analysis and hypothesis testing. Findings The results showed that variables including audit quality, normal audit fee and auditor tenure have a significant effect on money laundering. Originality/value Observing money laundering rules and regulations for businesses involves is a critical issue. In auditing the financial statements of the business units subject to these laws, the auditor reviews their actions to obtain reasonable assurance of guaranteeing the money laundering laws, evaluates their effectiveness and gains approval of managers regarding observing laundering regulations. In this regard, the auditor is required to report definitive or suspected money-laundering cases or its certain or suspected evidence to the relevant authorities. Although the law prohibits the auditor from disclosing such matters to the client, it is not necessary. It seems that even if the auditors perform non-audit functions, they should report money laundering or suspicious operations and transactions.

scholarly journals Does Non-Audit Service Compromise Audit Quality?

2017 ◽  
Vol 33 (2) ◽  
pp. 309-320 ◽  
Author(s):  
Hong-jo Park ◽  
Jeong-un Choi ◽  
Joonhei Cheung
Keyword(s):  
Research Method ◽  
Audit Quality ◽  
Comprehensive Analysis ◽  
Time Variable ◽  
Primary Reason ◽  
Accounting Quality ◽  
Analysis Study ◽  
Study Results ◽  
Audit Fee ◽  
Non Audit Services

This paper investigates the relationships between non-audit services, audit fee, audit hours and accounting quality. Previous studies have not provided consistent results for how simultaneous provision of audit and non-audit services by an independent auditor to a client company affects the audit quality. In addition, further studies have identified endogeneity in research method as the primary reason. Therefore, this study analyzed audit quality comprehensively using empirical analysis on data specific to Korea. This study employs research methods contrasting with existing studies in order to present a solution for the controversy related to the endogeneity from the effects of non-audit service provided by an independent auditor on audit quality. This study used audit compensation and abnormal accruals variables simultaneously, and audit time variable includes empirical data from Korean clients for comprehensive analysis. Study results found that the non-audit service significantly affects audit service quality before controlling for endogeneity. However, after controlling for endogeneity, even when the same independent auditor provides audit and non-audit services together, it did not affect the accounting quality. 

scholarly journals Etika Auditor sebagai Pemoderasi Fee Audit, Independensi, dan Kompetensi terhadap Kualitas Audit

2021 ◽  
Vol 2 (2) ◽  
pp. 14-28
Author(s):  
Amadea Devota ◽  
Hero Priono
Keyword(s):  
Significant Influence ◽  
Structural Equation ◽  
Audit Quality ◽  
Partial Least Square ◽  
Least Square ◽  
Primary Data ◽  
Quality Audit ◽  
Audit Fee ◽  
The Impact ◽  
Public Accountant

The objective of this  research  is to test and analyze the impact of the audit fee, independency, and competency on audit quality with ethics of auditor as moderation variable of Public Accountant Firm in Surabaya. The sample used in the research as many as 10 Public Accountant Firms which are represented by 46 people of auditors and  selected by convenience sampling method. Questionnaires is used as the primary data of this research, distributed  right to the auditors  in the  Public Accountant Firms  in Surabaya City that  are  used  as  research  sample. The  data  analysis  technique  used  Structural Equation Model (SEM) based Partial Least Square Analysis (PLS). The results in this research showed that (1) audit fee had positive and significant influence on audit quality, (2) independency had negative and significant influence on audit quality, (3) competency had positive and significant influence on quality audit, (4) ethics of auditor could moderate the influence on audit fee of quality audit, (5) ethics of auditor couldn’t moderate the influence on independency of quality audit, and (6) ethics of auditor could moderate the influence on competency of quality audit.

scholarly journals The impact of auditor rotation, audit firm rotation and non-audit services on earnings quality, audit quality and investor perceptions: a literature review

2018 ◽  
Vol 7 (2) ◽  
pp. 74-90 ◽  
Author(s):  
Patrick Velte ◽  
Thomas Loy
Keyword(s):  
Literature Review ◽  
Empirical Research ◽  
Audit Quality ◽  
Earnings Quality ◽  
The European Union ◽  
Quality Audit ◽  
Audit Firm ◽  
Research Activities ◽  
The Impact ◽  
Non Audit Services

This literature review evaluates 103 empirical research studies on the link between rotation and non-audit services on the one hand and their influence on earnings quality, audit quality and investor perceptions on the other hand. After the financial crisis 2008/09, regulators all over the world are aware of decreased stakeholder trust in earnings and audit quality. As a reaction, stricter rules on rotation and non-audit services by public interest entities (PIEs) have been implemented (e.g. in the European Union). However, the impact of these regulations on earnings and audit quality is still controversial. We briefly introduce the theoretical, normative and empirical audit framework that comprises an adequate structure of the state-of-the-art of empirical research in this field. We summarize the findings in each research area, while we split our rotation analysis in an audit firm and audit partner rotation and tenure and our dependent variables in earnings quality, audit quality and investor perception measures. Most of the cited studies are linked to earnings-related measures, especially abnormal accruals models. The mixed results can be explained by the different theoretical impacts of agency- and resource-based view. Finally, we will discuss the current limitations of the studies and give useful recommendations for future empirical research activities on this topic.

Mandatory Corporate Governance Rules and Auditor Behavior: The Case of Greece

2019 ◽  
Vol 54 (04) ◽  
pp. 1950015
Author(s):  
Konstantina Michalopoulou
Keyword(s):  
Corporate Governance ◽  
Risk Premium ◽  
Audit Quality ◽  
Audit Fees ◽  
Business Risk ◽  
Audit Opinion ◽  
Quality Audit ◽  
Audit Fee ◽  
The Impact ◽  
Of Greece

This study examines the impact of the first mandatory corporate governance regulation in the Greek environment on audit quality. Audit quality is operationalized with the number of audit qualifications, the monetary amount of audit qualifications, audit hours, and audit fees. It also utilizes the full content of the Greek audit report and constructs new audit quality proxies while it is the first that examines the association between corporate governance and actual audit hours. The findings suggest that following the implementation of the new regulation, auditors became more independent during the audit opinion process. Furthermore, the audit fee increases without audit hours showing a respective increase. It is concluded that the audit fee increase does not reflect differentiation in the delivered audit quality, as auditors do not exert more audit effort. The audit fee increase could reflect a risk premium due to the increase in auditors’ perceived business risk as a result of the increased spending and additional liability of listed companies under the new regulation.

scholarly journals PERAN AUDIT FEE DAN FAKTOR YANG MEMPENGARUHI KUALITAS AUDIT

2021 ◽  
Vol 13 (1) ◽  
pp. 32-45
Author(s):  
Zalfa Shafira Qatrunnada ◽  
Siti Sundari
Keyword(s):  
Audit Quality ◽  
Hypothesis Test ◽  
Sampling Technique ◽  
Audit Fees ◽  
Firm Reputation ◽  
Quality Audit ◽  
Audit Firm ◽  
Purposive Sampling ◽  
Auditor Switching ◽  
Audit Fee

Abstract: This research purpose to obtain empirical evidence regarding factor that has an influence on audit quality, such as the audit firm reputation, audit tenure and auditor switching with audit fees as the moderating. Company of manufacturing consumer goods industry sector listed on the Indonesia Stock Exchange (IDX) in 2015-2019 are used as the population in this study. Used 115 samples wich determined by purposive sampling technique. This study used logistic regression analysis with SPSS v.26 as an analysis technique. The result of hypothesis test showed that audit firm reputation has no significant effect on audit quality, audit tenure has a positive and significant effect on audit quality, auditor switching has no significant effect on audit quality, audit fees are not moderate the effect of audit firm reputation on audit quality, audit fees are weaken the effect of audit tenure on audit quality, and audit fees are not moderate the effect of auditor switching on audit quality. Abstrak: Tujuan dari penelitian berikut untuk memperoleh bukti empiris mengenai sejumlah faktor yang memberikan pengaruh terhadap kualitas audit seperti reputasi KAP, audit tenure dan auditor switching dengan audit fee sebagai pemoderasi pada perusahaan manufaktur bidang industri barang konsumsi yang terdaftar pada Bursa Efek Indonesia periode tahun 2015-2019. Sampel penelitian berjumlah 115 pengamatan yang ditetapkan dengan metode purposive sampling. Analisis data menggunakan regresi logistic dengan memanfatkan perangkat lunak SPSS v.26. Hasil penelitian menunjukkan audit tenure berpengaruh positif dan signifikan terhadap kualitas audit, sedangkan reputasi KAP dan auditor switching tidak berpengaruh signifikan terhadap kualitas audit. Selain itu, audit fee memperlemah pengaruh audit tenure terhadap kualitas audit, namun audit fee tidak mampu memoderasi pengaruh auditor switching dan reputasi KAP terhadap kualitas audit.

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