Purpose – The purpose of this paper is to examine investor reactions to auditor opinions containing qualifications or an emphasis of matter paragraph related to going concern uncertainty or financial distress. In particular, abnormal returns are analyzed around audit report dates. Design/methodology/approach – The event study methodology, focusing on a short event window, was used to determine whether there is an immediate market reaction to the audit report announcement, as might be expected assuming efficient stock markets. Findings – Overall, this analysis shows that the audit reports investigated have information content for investment decisions. In particular, the qualifications expressed in the audit report have a negative effect on stock prices. It is also shown that an unqualified opinion with an emphasis of matter paragraph regarding going concern uncertainty or financial distress has a positive effect on stock prices. These results also elucidate the distinction between different types of opinions in the Italian context. Research limitations/implications – This paper has attempted to limit the possible concurrent effects on stock prices using a short window event study methodology. However, the possibility that some other event may have occurred during this event window cannot be excluded. Among the policy implications coming from this research, it is argued that the authorities should regulate the public disclosure of audit reports, so that the information becomes available to the audited company and the other stakeholders on the same day, which, in theory, would be the day that the audit process concludes with the signing of the audit report. Originality/value – The findings of this paper show the relevance of audit reports, distinguishing the different impacts based on the types of audit opinions issued in a specific jurisdiction (qualified and unqualified with an emphasis of matter paragraph).

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This paper analyzes the first‐time application of mandatory disclosure in annual reports of audit and non‐audit fees in the Italian context. This information can give the readers of financial statements an indication of auditor independence (in appearance). An empirical analysis is conducted on year 2007 annual reports of 239 Italian listed companies. The main research objectives are as follows: (1) to provide a comprehensive description of the relative level of non‐audit fees; and (2) to investigate the relation between non‐audit services (NAS) and the opinion expressed in the audit report.

This article explores recent regulatory reforms in Italy and analyzes the fi rst-time application of mandatory disclosure in annual reports of audit and non-audit fees. This information can convey to readers of fi nancial statements an indication of auditor independence (in appearance). An empirical analysis is conducted on annual reports of 239 Italian listed companies for the year 2007.The main research objectives are as follows: (1) to provide a comprehensive description of the relative level of non-audit fees; and (2) to investigate the relation between non-audit services (NAS) and the opinion expressed in the audit report. The evidence shows that the average ratio of non-audit fees (further assurance services, tax advisory services and other services) to total auditor remuneration is 0.24. In particular, there are 38 companies (15.9 per cent) that paid their auditor more for NAS than for audit services; excluding further assurance services, there are 22 cases (9.2 per cent) with a ratio of non-audit fees that is higher than 0.50. In our sample, we observed 231 unqualifi ed opinions (96.7 per cent) and eight qualifi ed opinions (3.3 per cent): a statistical signifi cant relationship between the NAS ratio and qualifi ed opinions was not found. However, the study ' s results show that there is a positive association between the emphasis of matter paragraph in the audit report and NAS. This fi nding cannot be interpreted as an indication of compromised auditor independence, thus opening space for further empirical studies on the use of emphasis of matter paragraphs in auditor reports.

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Abstract:The paper examines some of the theoretical issues regarding the publication of the value added statement as a voluntary disclosure in the process of accounting communication. The social and economic motivation to use value added reporting is linked to the general process of disclosing financial information in a certain business and cultural environment. in this framework, a question arises about the possible role of the value added statement as a way of accounting communication in the global economy. A survey of 211 published financial statements for the fiscal period 2003 of italian listed companies shows that the publication of the value added statement in the annual reports is a marginal phenomenon. however, the industrial and services firms voluntarily present in their annual report and income statements rearranged to expose the (industrial) value added by only looking at the production perspective, with a possible interpretation in terms of cost efficiency. Key words: value added statement, annual reports, voluntary disclosures, italian listed companiesAbstrakt: Práce zkoumá některá teoretická východiska týkající se publikování výkazů o přidané hodnotě jako dobrovolné informace vycházející z účetnictví podniku. Socio-ekonomická motivace využití výkazů o přidané hodnotě je spojena s obecným procesem zveřejňování finančních informací o určitém podniku a s kulturním prostředím. V rámci tohoto zkoumání je diskutována otázka o možné úloze výkazu o přidané hodnotě jako součásti účetní komunikace v globální ekonomice. Přehled 211 publikovaných finančních zpráv italských registrovaných společností za účetní období roku 2003 ukazuje, že zveřejňování údajů o přidané hodnotě je v rámci výročních zpráv pouze marginální záležitostí. Průmyslové podniky a podniky služeb nicméně dobrovolně předkládají své výroční zprávy a výkazy o příjmech upravené tak, aby ukazovaly přidanou hodnotu z produkčního hlediska s možnou interpretací z hlediska nákladové efektivnosti.Klíčová slova: výkaz o přidané hodnotě, výroční zprávy, dobrovolné zveřejňování, italské registrované společnosti

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