scholarly journals The economic impact of audit failures

2022 ◽  
Vol 25 (1) ◽  
pp. 159-173
Author(s):  
Cristina De Fuentes Barberá ◽  
Rubén Porcuna
Keyword(s):  
Market Share ◽  
Relative Number ◽  
Economic Consequences ◽  
Control Group ◽  
Audit Failure ◽  
Audit Market ◽  
Audit Firms ◽  
The Difference ◽  
Investigation Process ◽  
Public Oversight

This paper examines the economic consequences associated with an audit failure in the field of statutory auditing services, by analyzing changes in the audit firm’s market share around the time of the investigation process undertaken by the Spanish Public Oversight Board. We explore the variations in audit market share by applying the difference in differences method to a treatment group of 70 sanctioned audit firms and a matched control group of 70 non-sanctioned audit firms. The period of analysis covers the years from 1999 to 2015. Our results show that the sanctioned audit firms suffered a significant decrease in their relative number of clients. Moreover, this measure of market share decreased not only after the publication of the sanction disclosure (which may be attributed to reputational losses) but also after the initiation of the investigation (which may be attributed to the firm’s reluctance to audit risky clients). Findings are similar for both small and large firms when the market share is measured in terms of clients, whereas the evidence is weak concerning variations in their turnover-based market share. Our conclusions could be of interest for audit firms and also for audit regulators when designing disciplinary systems. Este trabajo examina las consecuencias económicas asociadas a un fallo de auditoría en el ámbito de los servicios de auditoría legal, analizando los cambios en la cuota de mercado de la firma de auditoría en torno al momento del proceso de investigación emprendido por el Consejo de Supervisión Pública español. Exploramos las variaciones en la cuota de mercado de la auditoría aplicando el método de diferencia en diferencias a un grupo de tratamiento de 70 firmas de auditoría sancionadas y a un grupo de control emparejado de 70 firmas de auditoría no sancionadas. El periodo de análisis abarca los años comprendidos entre 1999 y 2015. Nuestros resultados muestran que las firmas de auditoría sancionadas sufrieron un descenso significativo en su número relativo de clientes. Además, esta medida de la cuota de mercado disminuyó no sólo después de la publicación de la comunicación de la sanción (lo que puede atribuirse a las pérdidas de reputación), sino también después del inicio de la investigación (lo que puede atribuirse a la reticencia de la empresa a auditar clientes de riesgo). Los resultados son similares tanto para las pequeñas como para las grandes empresas cuando la cuota de mercado se mide en términos de clientes, mientras que la evidencia es débil en lo que respecta a las variaciones de su cuota de mercado basada en el volumen de negocio. Nuestras conclusiones podrían ser de interés para las firmas de auditoría y también para los reguladores de la auditoría a la hora de diseñar sistemas disciplinarios.

Industry Specialization by Auditors

1999 ◽  
Vol 18 (1) ◽  
pp. 1-17 ◽  
Author(s):  
Chris E. Hogan ◽  
Debra C. Jeter
Keyword(s):  
High Risk ◽  
Market Share ◽  
Scale Economies ◽  
The Other ◽  
Industry Specialization ◽  
Audit Market ◽  
Audit Firms ◽  
Regulated Industries ◽  
Concentration Levels ◽  
Over Time

Dramatic changes in recent years in the audit market suggest the timeliness of an investigation of trends in auditor concentration and an extension of prior research (e.g., Danos and Eichenseher 1982). In recent press, large audit firms have claimed that specialization is a goal of increasing importance. Peat Marwick, for example, has restructured along industry lines, claiming to be recruiting professionals for national teams of multidisciplinary experts organized to “focus on the same industry to serve clients optimally.” On the other hand, litigation concerns might prompt auditors to diversify their risks by diversifying their clientele. In this study, we examine trends in industry specialization from 1976 to 1993 and the industry factors which may affect specialization; whether market share increases are greater for audit firms classified as specialists; and whether the nation's largest audit firms have increased their market share in the industries which they have identified as their focus industries. We find evidence that concentration levels have increased over this period, consistent with the claims of the large audit firms. We find that auditor concentration levels are higher in regulated industries, in more concentrated industries and in industries experiencing rapid growth, but lower in industries with a high risk of litigation. Levels of concentration have increased over time in nonregulated industries providing evidence that scale economies or superior efficiencies of heavy-involvement auditors are not limited to regulated industries but extend to nonregulated industries as well. We also find that for the audit firms classified as market leaders at the beginning of the year, market share has increased over time, whereas market share has declined for firms with a smaller share at the beginning of the year. This suggests that there are returns to investing in specialization.

Industry Specialization by Global Audit Firm Networks

2009 ◽  
Vol 84 (2) ◽  
pp. 355-382 ◽  
Author(s):  
Elizabeth Carson
Keyword(s):  
Market Share ◽  
Industry Specialization ◽  
Audit Firm ◽  
Global Industry ◽  
Audit Market ◽  
Audit Firms ◽  
Audit Fee ◽  
Firm Networks ◽  
National Industry

ABSTRACT: This study investigates the role of global audit firm networks in the market for audit services. Underlying theory suggests that there are benefits from the use of network structures, which enable these firms to expand efficiently into the global audit market and to develop global industry specializations. I identify global and national industry specialist auditors via market share metrics based on client assets audited, and use a large sample of 15,583 clients from 62 countries in 2000 and 14,628 clients from 60 countries in 2004. I find in both periods that audit fee premiums are consistently associated with global specialist auditors, irrespective of whether those audit firms are or are not national specialists.

Spatial Competition at the Intersection of the Large and Small Audit Firm Markets

2015 ◽  
Vol 35 (1) ◽  
pp. 23-45 ◽  
Author(s):  
Kenneth L. Bills ◽  
Nathaniel M. Stephens
Keyword(s):  
Market Share ◽  
Spatial Competition ◽  
Audit Fees ◽  
Differential Impact ◽  
Audit Firm ◽  
Audit Market ◽  
Big 4 ◽  
Audit Firms ◽  
The U.S ◽  
Jel Classifications

SUMMARY In this paper, we study spatial competition in the U.S. audit market while accounting for its two-tiered nature. We provide evidence on the differential impact that market share distances within and between the players in the large and small audit markets have on competition. We find that the market share distance from small audit firm competitors has a greater effect on the Big 4's audit fees than distances from other Big 4 competitors. This finding suggests that small audit firms play a significant part in the competitive landscape in local markets. Further, we find that audit fees are increasing with the distance between a small audit firm and its closest competing small audit firm while audit fees are decreasing with the distance between a small audit firm and its closest competing large audit firm. This suggests that while obtaining separation in market space from competing small audit firms reduces competitive pressure from other small audit firms, as a small audit firm gets closer to the market space of a large audit firm it is perceived as being more like the larger audit firm and is able to obtain a fee premium like that attained by the larger audit firms. JEL Classifications: M4; M40; M41; M42; M49.

scholarly journals ВІДНОСНІ ПОКАЗНИКИ ІМУНОГРАМ У СЕРОПОЗИТИВНИХ НА ТОКСОПЛАЗМЕНУ ІНВАЗІЮ СОБАК ТА КОТІВ

2016 ◽  
Vol 18 (2(66)) ◽  
pp. 20-24
Author(s):  
M.M. Broshkov ◽  
D.S. Trokosi ◽  
A.A. Sheviakova
Keyword(s):  
Marked Reduction ◽  
Species Difference ◽  
Relative Number ◽  
Main Element ◽  
Control Group ◽  
Cell Mediated Immunity ◽  
Percentage Decrease ◽  
T Helper Lymphocytes ◽  
The Difference ◽  
Experimental Group

In most parasitic diseases, the main element of protection of an organism is cell-mediated immunity. His immunological reactivity depends on the ability of an organism to respond adequately to the introduction of antigen. Evaluation of relative indices of the immunogram of HIV-positive dogs and cats have shown that a more pronounced decrease in the relative number of lymphocytes in the experimental group were observed in dogs (33% of the trial) compared with cats (22%). This species difference is probably due to the development cycle of the pathogen and the fact, namely, dogs are the ultimate owners unlike cats. Comparing the relative number of T-helper lymphocytes, it should be noted that seropositive dogs, the figure was higher (by 15% in comparison with the control) and in the middle pozitivnih cats on the contrary marked reduction (47% compared to control). In experimental dogs, compared with control the ability of neutrophils to phagocytosis is less than 8% and cats the difference is 1.5%.When the relative amount by B-lymphocytes in seropositive dogs and cats found that subpopulation of lymphocytes, unlike T-cells, in contrast was higher in the experimental group of animals. In the control group of dogs and cats of these cells is within 11%. In the experimental group of cats increased number of these cells is more pronounced and 3.25% more than in the experimental group of dogs. Analysis of the relative amount of lymphocytes NK- showed that the number of these cells is lower in seropositive for toxoplasmosis dogs and cats. A marked reduction of cell found in cats experimental group (by 5.25%), but in dogs by 1.75%.Given the slight percentage decrease ability neutrophil phagocytosis can be assumed that this cell population is not exposed to marked reduction due to specific receptors vidsutnistyu toksoplazmenoho antigen and it does not allow pathogens directly affect the functional activity of these cells.

scholarly journals Resource allocation specialization, market recognition specialization and audit fees: evidence from the Chinese audit market

2015 ◽  
Vol 12 (4) ◽  
pp. 763-778
Author(s):  
Yingfei Liu ◽  
Chris Patel ◽  
Sammy Xiayan Ying ◽  
Hao Qiu
Keyword(s):  
Resource Allocation ◽  
Market Share ◽  
Audit Fees ◽  
Social Contexts ◽  
Industry Specialization ◽  
Audit Market ◽  
Audit Firms ◽  
Anglo American

Existing literature on audit industry specialization in Anglo-American countries often measures industry specialization using firms’ market share in specific industries from market recognition perspective. This paper contributes to the audit industry specialization research by distinguishing between market recognition specialization and resource allocation specialization, and tests their different effects on audit fees in the Chinese audit market. The results support the hypotheses that market recognition specialization is likely to lead to higher audit fees in the whole audit market, resource allocation specialization is likely to lead to lower audit fees in ‘top–ten’ audit firms, and there is likely to be no effect of resource allocation specialization on audit fees in ‘non–top–ten’ audit firms. The findings have implications for the regulators both in China and globally in designing strategies to enhance the functioning of audit firms. Importantly, the findings suggest that economic, political and social contexts of a country cannot be ignored in examining audit industry specialization

The Effects of a Caffeine Placebo and Experimenter Expectation on Blood Pressure, Heart Rate, Well-Being, and Cognitive Performance

2001 ◽  
Vol 6 (1) ◽  
pp. 15-25 ◽  
Author(s):  
Harald Walach ◽  
Stefan Schmidt ◽  
Yvonne-Michelle Bihr ◽  
Susanne Wiesch
Keyword(s):  
Blood Pressure ◽  
Heart Rate ◽  
Cognitive Task ◽  
Well Being ◽  
Control Group ◽  
Double Blind ◽  
Main Effect ◽  
The Difference ◽  
Being There ◽  
To Receive

We studied the effect of experimenter expectations and different instructions in a balanced placebo design. 157 subjects were randomized into a 2 × 4 factorial design. Two experimenters were led to expect placebos either to produce physiological effects or not (pro- vs. antiplacebo). All subjects except a control group received a caffeine placebo. They were either made to expect coffee, no coffee, or were in a double-blind condition. Dependent measures were blood pressure, heart rate, well-being, and a cognitive task. There was one main effect on the instruction factor (p = 0.03) with the group “told no caffeine” reporting significantly better well-being. There was one main effect on the experimenter factor with subjects instructed by experimenter “proplacebo” having higher systolic blood pressure (p = 0.008). There was one interaction with subjects instructed by experimenter “proplacebo” to receive coffee doing worse in the cognitive task than the rest. Subjects instructed by experimenter “antiplacebo” were significantly less likely to believe the experimental instruction, and that mostly if they had been instructed to receive coffee. Contrary to the literature we could not show an effect of instruction, but there was an effect of experimenters. It is likely, however, that these experimenter effects were not due to experimental manipulations, but to the difference in personalities.

Peritoneal Fluid and Plasma Fibrinolytic Activity in Women with Pelvic Inflammatory Disease

1992 ◽  
Vol 68 (02) ◽  
pp. 102-105 ◽  
Author(s):  
P J Dörr ◽  
E J P Brommer ◽  
G Dooijewaard ◽  
H M Vemer
Keyword(s):  
Pelvic Inflammatory Disease ◽  
Inflammatory Disease ◽  
Peritoneal Fluid ◽  
Fibrinolytic Activity ◽  
Degradation Products ◽  
Adhesion Formation ◽  
High Rate ◽  
Control Group ◽  
The Difference ◽  
Fibrinolytic Parameters

SummaryPrevious studies have shown that the fibrinolytic activity of peritoneum is depressed in local inflammation. We measured fibrinolytic parameters in peritoneal fluid and in plasma of 10 women with pelvic inflammatory disease (PID). Nine women, in whom laparoscopy for sterilisation was performed, served as a control group.In the peritoneal fluid of women with PID, PAI-Ag, t-PA-Ag and u-PA-Ag were many times higher than in the control group. In contrast to the antigens which may be present in inert complexes, the potentially active compounds, measured as t-PA activity and plasmin-activable scu-PA, were not significantly different in the two groups, and in none of the samples was the active enzyme tcu-PA detectable. Nevertheless, the mean peritoneal fluid TDP and FbDP concentrations were about twenty times higher in the PID group than in the control group. In plasma of PID patients, none of the parameters except u-PA-Ag differed from those in the control group. The difference between control and patient plasma u-PA-Ag was statistically significant, but too small to attach any relevance to the observation.Our data suggest that, in contrast to the classical concept of decreased fibrinolytic activity as a cause of adhesion formation, intraperitoneal fibrinolysis is enhanced in peritoneal inflammation through stimulation of the local production of t-PA and u-PA. Despite concomitant production of PAI, fibrinolysis occurs at a high rate, resulting in high levels of fibrin degradation products. Since this activated fibrinolysis does not meet the demand, therapeutic enhancement should be considered to prevent adhesions.

Changes in Platelet Aggregability after Ovariectomy

1979 ◽  
Vol 42 (04) ◽  
pp. 1332-1339 ◽  
Author(s):  
Hiroh Yamazaki ◽  
Takeshi Motomiya ◽  
Minoru Sonoda ◽  
Noboru Miyagawa
Keyword(s):  
Platelet Count ◽  
Platelet Activation ◽  
Ovarian Hormones ◽  
Control Group ◽  
Platelet Aggregability ◽  
Appearance Rate ◽  
Before And After ◽  
The Difference ◽  
Induced Aggregation ◽  
Observation Period

SummaryChanges in platelets in 48 patients with uterine myoma before and after hysterectomy with and without ovariectomy were examined. Bilateral ovariectomy in 25 cases (ovariec-tomized group) and unilateral or non-ovariectomy in 23 cases (control group) were performed at the hysterectomy. Platelet count and an appearance rate of secondary aggregation decreased at one day after and increased at one week after the operation, similarly in both the ovariectomized and the control group. The appearance rate of secondary aggregation was reflected in an intensity of aggregation at 5 min after the addition of reagent to PRP. At one month after the operation, the appearance rate of secondary aggregation induced by 3 μM ADP showed a statistically significant decrease in comparison with the preoperation value (P <0.05) and the enhancement of 5-min aggregation was still observed in the control group, while ceased in the ovariectomized group. The difference between the two groups was significant (P < 0.05). There was almost no change in the speed and intensity of primary and secondary aggregation during the observation period. No significant differences in collagen-induced aggregation were noted between the two groups. The results suggest that ovarian hormones, mainly estrogen, facilitate platelet activation which is mediated by the so-called secondary aggregation.

PENGARUH TERAPI TERTAWA TERHADAP PENURUNAN TEKANAN DARAH LANSIA DI UPT PANTI WREDHA BUDHI DHARMA YOGYAKARTA

2019 ◽  
Vol 13 (1) ◽  
Author(s):  
Niken Setyaningrum ◽  
Andri Setyorini ◽  
Fachruddin Tri Fitrianta
Keyword(s):  
Blood Pressure ◽  
Data Analysis ◽  
The Elderly ◽  
Control Group ◽  
Group Comparison ◽  
Control Blood Pressure ◽  
Men And Women ◽  
Treatment Of Hypertension ◽  
Before And After ◽  
The Difference

ABSTRACTBackground: Hypertension is one of the most common diseases, because this disease is suffered byboth men and women, as well as adults and young people. Treatment of hypertension does not onlyrely on medications from the doctor or regulate diet alone, but it is also important to make our bodyalways relaxed. Laughter can help to control blood pressure by reducing endocrine stress andcreating a relaxed condition to deal with relaxation.Objective: The general objective of the study was to determine the effect of laughter therapy ondecreasing elderly blood pressure in UPT Panti Wredha Budhi Dharma Yogyakarta.Methods: The design used in this study is a pre-experimental design study with one group pre-posttestresearch design where there is no control group (comparison). The population in this study wereelderly aged over> 60 years at 55 UPT Panti Wredha Budhi Dharma Yogyakarta. The method oftaking in this study uses total sampling. The sample in this study were 55 elderly. Data analysis wasused to determine the difference in blood pressure before and after laughing therapy with a ratio datascale that was using Pairs T-TestResult: There is an effect of laughing therapy on blood pressure in the elderly at UPT Panti WredhaBudhi Dharma Yogyakarta marked with a significant value of 0.000 (P <0.05)

Sign in / Sign up

Export Citation Format

Share Document