Association between audit opinion and provision of non‐audit services

Abstract

Purpose -While a few US studies on the impact of the provision of non-audit services on auditor judgment have found potential harm to independence, it is the purpose of this study to investigate whether the British and Australian auditors' involvement with both audit and non-audit services for the same clients may also produce similar results. Design/methodology/approach -The parametric t-tests and the nonparametric Mann-Whitney tests are used in this study on the empirical data from the British and Australian companies to examine the potential for loss of independence when high levels of non-audit services are provided to audit clients. Findings -The results corroborated the US Securities and Exchange Commission's contention that the provision of non-audit services may indeed impair independence. Research limitations/implications -No attempts were made to isolate the effects of other factors that could result in the issuance of qualified opinions. In addition, the sample used in this investigation is comprised of firms that had voluntarily disclosed non-audit fees in the early years of the study. This could potentially introduce a self-selection bias. Nevertheless, this study is one of a kind in the international arena. Originality/value -This paper extends the line of research examining the impact of non-audit services on the auditor's independence.

In Search of a Measure of Effectiveness for Internal Audit Functions: An Institutional Perspective

“…EA is concerned about the independence of IA and about how threats to independence (Mutchler, 2003) are mitigated, as internal auditors are typically paid by the organization to which they are supposed to render independent assurance and consulting services. Some studies provide evidence that the provision of non-audit services may harm the external auditors' independence, consequently, SOX regulation in the U.S. limited the scope of such services (Ahadiat 2011), however, potential parallels to the world of IA and the simultaneous provision of assurance and consulting services has not yet been fully examined.…”

Relação entre as Características da Empresa, do Comitê de Auditoria e do Auditor Independente com o Prazo de Publicação das Demonstrações Financeiras

“…Ahadiat (2011) identificou em sua pesquisa, que os grupos de empresas com parecer sem ressalva apresentavam maior média de honorários de não auditoria em relação ao grupo de empresas que possuíam parecer com ressalva. Analisando a Tabela 1, percebe-se que no mínimo 50% das empresas não contratavam serviços de não auditoria -este valor é percebido na mediana que comporta valor igual a R$0,00.…”

“…O prazo de publicação das demonstrações financeiras pode ainda ser influenciado por caracterís-ticas da auditoria independente, como o tamanho da firma de auditoria (Afify, 2009;Ahmed, 2003) e os honorários de não auditoria (Mironiuc, Chersan & Robu, 2013;Ahadiat, 2011). Empresas de auditoria de grande porte, por possuírem incentivos maiores para a finalização do trabalho de auditoria, contribuem para a redução do tempo de publicação das demonstrações financeiras (Afify, 2009).…”

“…Empresas de auditoria de grande porte, por possuírem incentivos maiores para a finalização do trabalho de auditoria, contribuem para a redução do tempo de publicação das demonstrações financeiras (Afify, 2009). Quanto ao serviço de não auditoria, quando estes são valores altos, podem reduzir a independência da auditoria, bem como apresentar baixo nível de transparência de informação financeira, interferindo no prazo de publicação das demonstrações financeiras (Ahadiat, 2011;Mironiuc et al, 2013).…”

Do auditors make mistakes when they write audit reports? An empirical study applied to Spanish non-listed firms

“…But from the empirical evidence of the existing literature, (Ahadiat, 2011;Caso, García, López, & Martínez, 2003;Duréndez & Sánchez, 2008;Ruiz-Barbadillo, Gómez, & Carrera, 2006;Xu, Carson, Fargher, & Jiang, 2013;Xu, Jiang, Fargher, & Carson, 2011;Zdolsek & Jagric, 2011), auditors are somewhat reluctant to issue either of these last two opinions, and it can be appreciated that, in general, there is a tendency to classify reports into two major sections, favourable reports and qualified reports, including in the latter qualified, refused and unfavourable reports.…”