Audit quality and executive officers’ affiliations with CPA firms

Lennox, Clive S.

doi:10.1016/j.jacceco.2003.12.002

Cited by 208 publications

(202 citation statements)

References 20 publications

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“…The auditing literature is replete with examples showing pronounced quality effects of the major "Big Four" audit firms (e.g. Lennox, 2005). A similar argument can be made for compensation consultant services.…”

Section: The Market For Expert Compensation Servicesmentioning

confidence: 90%

Compensation Consultants and Executive Pay

Conyon¹

2010

Corporate Governance

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This study investigates the relation between compensation consultants and CEO pay using a unique data set of over 200 publicly traded UK firms. We present theoretical arguments that compensation consultants (who are experts in the market for compensation services) promote pay contracts to align managerial and shareholder interests. Empirically we show that CEO pay is greater in firms using large consultants, namely consultants with a greater number of clients. There are other important contingencies. We find that CEO pay is greater in firms whose compensation consultants supply other services to the client firm. We also find CEO pay is greater the higher is the average CEO pay of the consultants other clients. To explain this phenomenon we draw on two other theoretical paradigms --managerial power and social comparison theory. Overall, the evidence provides consistent support for our hypotheses. We argue that the results have important implications for executive pay scholars, as well as for the designers of compensation packages. (JEL G31, G34, M41)

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Section: The Market For Expert Compensation Servicesmentioning

confidence: 90%

Compensation Consultants and Executive Pay

Conyon¹

2010

Corporate Governance

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“…They find clients with former audit partners as either an employee or a director have larger abnormal accruals than clients with no former audit partners. Lennox (2005) researches audit opinions for clients with executives who are former auditors, though not necessarily partners. He finds clients affiliated with their auditor through executives who are firm alumni are more likely to receive clean audit opinions.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Former Audit Partners on Audit Committees: Implications for Russian Corporate Governance

Scalan

2017

JEECAR

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The Moscow Exchange in conjunction with the Organization for Economic Cooperation and Development (OECD) continues to address improvements in Russian corporate governance by conducting annual roundtables (OECD, 2017). My research relates to corporate governance provided by audit committees. I examine relationships between former audit partner (FAP) audit committee members and auditors, via a network similar to the interlocking directorate. Using a dataset of U.S. auditor dismissals, I construct unique network variables measuring the relational ties between FAP audit committees and auditors. I find some evidence suggesting ties created by former audit partners may increase auditor switching possibly indicating impaired auditor independence.This outcome suggests implications for Russian corporate governance because it is likely Russian Boards of Directors would experience similar circumstances as their U.S. counterparts. As the Moscow Exchange continues its partnership with the OECD to improve corporate governance, audit quality and auditor independence should be considered in the dialogue.

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“…Thus, a modified opinion audit is largely used like an indicator of the audit quality, at the same time in the literature of the audit (for example, Chow & Rice, 1982;Craswell, Stokes, & Laughton, 2002;Krishnan, 1994;Lennox, 2005) and in studies related to China (Chan, Flax, & Mo, 2006;Chen, Chen, & Known, 2001;Chen et al, 2010;Wang et al, 2008). Also see Chen et al (2000Chen et al ( , 2001, Chen et al (2010) and Wang et al (2008).…”

Section: Determinants Of the Opinion Of Audit Modifiedmentioning

confidence: 99%

Determinants of Audit Opinion after the Scandals of Enron: Empirical Validation in the French Context

Soltani¹

2016

IJBM

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This study examines the effect of regulatory changes on audit quality in the French context. The evaluation of the risks and the anomalies carried out by the auditors brings them control relating to the financial statements of the company in order to express an opinion on the effectiveness, the regularity, the sincerity and the faithful image of these documents, in a large complexity of the organizations the objective of this research consists in studying the effect of the evolutions of the regulation as regards legal audit on the estimate of the probability of having an opinion of audit with reserve which reinforces the independence of the auditor.A list of hypothesis related to the approached problems is proposed followed by an overview of the different theoretical propositions which are in place. From a sample of French companies in the SBF 250 over the period 2002-2011, the results show that the analysis of the conditions of receiving a qualified audit opinion is determined by: the variables of the financial health of the company, the inventory receivables which indicate the complexity of the audited firm and the characteristics of the audit.

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Audit quality and executive officers’ affiliations with CPA firms

Cited by 208 publications

References 20 publications

Compensation Consultants and Executive Pay

Compensation Consultants and Executive Pay

Former Audit Partners on Audit Committees: Implications for Russian Corporate Governance

Determinants of Audit Opinion after the Scandals of Enron: Empirical Validation in the French Context

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