Auditors' Incentives and Audit Quality: Non-Audit Services versus Contingent Audit Fees

Mahieux, Lucas

doi:10.1080/09638180.2022.2066011

Cited by 5 publications

(6 citation statements)

References 58 publications

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“…Using a cross-sectional survey conducted in 1977 of 397 US public companies, Simunic (1980) concluded that there was price competition and the Big 8 were not monopolizing the market for audit services. Other studies came to similar conclusions (Maher et al ., 1992).…”

Section: Results: Regulation and Audit Feessupporting

confidence: 81%

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Self-regulation versus government oversight: audit fees research

Agana

Alon

Zamore

2023

JAL

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PurposeWith Sarbanes–Oxley Act of 2002 (SOX), the self-regulation of the auditing profession was replaced with standard setting and oversight by the government. The authors focus on the audit fees literature to examine how this change impacted research trends over time and shaped different aspects of audits.Design/methodology/approachThe authors utilized bibliometric and content analysis to identify research themes pre- and post-SOX.FindingsThe change in regulation contributed to an increased focus on clients and continued interest in engagement characteristics as added requirements emphasized the client's governance structure, the auditor's tenure and the type of services provided.Originality/valueThe prominent issue that emerged is how deficiencies in the audit processes and in the client's internal controls are translated into audit fees. The authors discuss regulatory initiatives pursued in other jurisdictions, including mandatory rotation of firms, joint audits and further limitations on non-audit services, as intended and unintended consequences of these requirements warrant further examination.

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Section: Results: Regulation and Audit Feessupporting

confidence: 81%

“…The colors represent clusters based on VoSviewer's bibliographic coupling where articles with the same color belong to the same cluster. For instance, in Figure 3, Maher et al . (1992) and Ward et al .…”

Section: Results: Regulation and Audit Feesmentioning

confidence: 99%

Self-regulation versus government oversight: audit fees research

Agana

Alon

Zamore

2023

JAL

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“…In such economies if prices move because of noise trading, poor ownership and political unrest, it will end in poor allocation of resources and decline in economic process. Greater investor protection, good audit quality, and efficient enforcement system by the state can transmit company information into the share price, and consequentially co-movement of share price decrease the stock price crash risk (Han and Singal, 2000;Mahieux, 2022). The Audit quality is vibrant from another aspect.…”

Section: Introductionmentioning

confidence: 99%

Impact of Audit Quality on Stock Price Crash Risk: Evidence from Pakistan Stock Exchange

et al. 2022

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Stock price crash risk is an unfavourable event in business that may decrease the shareholder’s wealth and hurt stability and capital market growth. This study investigates the impact of audit quality measured by auditor industry specialization (AIS), audit tenure (AT), audit committee independence (ACI), audit firm size(AFS)) on stock value crash (measured by down-to-up unpredictability) for a sample of 70 non-financial firms listed in Pakistan Stock Exchange during from 2009 to 2018. Efficient governance enriches financial and operational directness, which cuts down the stock value crashes in rotation. Facing crash risk difficulties, traders impart more funds to stocks of well-regime organizations. The fixed effect model results show that AIS and ACI have a negative and significant impact on crash risk, while there is a positive impact of AFS on stock price crash risk. Moreover, it concludes that it has an insignificant impact on stock price crash risk in Pakistan. It is concluded that effective audit quality lessens the difficulty of data abnormality and improves stock price crash risk. This study has importance for investors to help them identify the most liquid stock and will enable them to decide which stocks to acquire and which to dispose of. This study will also be helpful for academics and scholars to bridge this gap on the influence of audit quality practices on the economic consequences of Pakistan. It will be useful for future research as well as because it will become part of the empirical literature on the economic consequence of stock markets.

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“…For a sample of 78 publicly traded U.S. companies, Maher et al (1992) find that inflation-adjusted audit fees declined significantly over the period 1977-1981 in which competition was assumed to increase. Sanders and Allen (1995) also document a real decrease in audit fees for U.S. publicsector audits during the period 1985-1989 with more intense competition.…”

Section: Concenmentioning

confidence: 99%

“…Pong (2004) analyzes the audit fees paid by 708 quoted companies that had hired the same audit firm during the sample period and finds that inflation-adjusted audit fees in the United Kingdom decreased by 9.7% over the period between 1991 and 1995. However, all these studies do not directly measure concentration or competition: In the first-differences design of Maher et al (1992), the fee development that cannot be explained by changes in the independent variables are contained in the intercept of the regression with the difference in audit fees as the dependent variable. Sanders and Allen (1995) compare predicted fees with actual fees, and Pong (2004) uses dummies for the years 1992-1995 as well as a Big 4 dummy.…”

Section: Concenmentioning

confidence: 99%