Do companies successfully engage in opinion-shopping? Evidence from the UK

Lennox, Clive S.

doi:10.1016/s0165-4101(00)00025-2

Cited by 313 publications

(286 citation statements)

References 14 publications

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“…Client retention incentives depend on the importance of the client (DeAngelo, 1981) and the likelihood that the client will switch the audit firm in case of disagreements (Dye, 1991;Lennox, 2000). We construct a setting with high client retention incentives.…”

Section: Measured Independent Variables: Client Retention Incentivesmentioning

confidence: 99%

Can Auditors be Independent? Experimental Evidence on the Effects of Client Type

Koch

Weber

Wüstemann

2012

European Accounting Review

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Recent regulatory initiatives stress that an independent oversight board, rather than the management board, should be the client of the auditor. In an experiment, we test whether the type of client affects auditors' independence. Unique features of the German institutional setting enable us to realistically vary the type of auditors' client as our treatment variable: we portray the client either as the management preferring aggressive accounting or the oversight board preferring conservative accounting. We measure auditors' perceived client retention incentives and accountability pressure in a post-experiment questionnaire to capture potential threats to independence. We find that the type of auditors' client affects auditors' behaviour contingent on the degree of the perceived threats to independence. Our findings imply that both client retention incentives and accountability pressure represent distinctive threats to auditors' independence and that the effectiveness of an oversight board in enhancing auditors' independence depends on the underlying threat. JEL: C90, K22, M42

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Section: Measured Independent Variables: Client Retention Incentivesmentioning

confidence: 99%

Can Auditors be Independent? Experimental Evidence on the Effects of Client Type

Koch

Weber

Wüstemann

2012

European Accounting Review

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“…Third, companies that own subsidiaries of other companies of 20% or greater are also excluded from the sample in the current study (DeFond, 1992;Johnson and Lys, 1990). Forth, companies that change their auditors because of merging at any time during the period considered in this study are excluded (Johnson and Lys, 1990;Lennox, 2000;Khalil et al, 2010). Fifth, companies that have received adverse or disclaimer opinions at any time during the period considered in this study are eliminated (DeFond, 1992).…”

Section: Sample and Datamentioning

confidence: 99%

Internal corporate governance mechanisms and audit quality: Evidence from GCC region

Hassan¹,

Aljaaidi²,

Abidin³

et al. 2018

Int. j. adv. appl. sci.

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Using the suggestions of agency theory alone for predicting the auditor change behavior in the context of GCC countries is inappropriate because they were developed in countries with mature market-oriented economies. In this study, we examine the association of board of directors effectiveness (board of directors independence, size, financial expertise, meetings, nationality, international experience and CEO duality) and audit committee effectiveness (audit committee independence, size, financial expertise, meetings, nationality and international experience) with the incidence of auditor change among Gulf Cooperation Council (GCC) public listed companies for the period 2005-2010. We posit that using an integration framework of agency theory, managerial grid theory, and attractionselection-attrition has more explanatory power to predict auditor change behavior in GCC setting, taking into account economic and behavioral issues. The results show that only board of directors' effectiveness is significantly associated with the incidence of auditor change. This study finds out that the economic and the behavioral activities are related to the audit demand in the GCC. Moreover, the study suggests that regulators, especially GCC stock exchanges, should force companies to disclose all relevant information related to auditor change in a transparent and timely manner, and increase law enforcement to enhance good corporate governance practices. For companies, this study proposes that they should put more emphasis on enhancing the role and the quality of the board of directors and audit committee members, as they are involved in the decision of auditor change.

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“…Penelitian yang telah dilakukan oleh Lennox (2000), Ramadhany (2004), Setyarno et al (2006), Januarti (2007), Rahayu (2007), Januarti dan Fitrianasari (2008), Praptitorini dan Januarti (2011), memperkuat bukti bahwa opini audit GC yang diterima tahun sebelumnya akan mempengaruhi penerimaan opini audit GC tahun berjalan. Apabila pada tahun sebelumnya auditor telah menerbitkan opini going concern, maka akan semakin besar kemungkinan auditor untuk menerbitkan kembali opini yang sama pada tahun berjalan.…”

Section: Opini Audit Tahun Sebelumnyaunclassified

Pertimbangan Auditor Dalam Memberikan Opini Audit Going Concern

Solikhah¹

2017

EKUITAS

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Going concern audit opinion will cause a decline in public trust ABSTRAKOpini audit going concern akan menyebabkan menurunnya kepercayaan publik dan bahkan mungkin akan mempercepat perusahaan mengalami kebangkrutan sebagaimana dalam hipotesis self-fulfilling prophecy. Penelitian ini menguji faktor keuangan dan non keuangan dengan harapan dapat diperoleh model yang komprehensif yang dapat dipertimbangkan auditor dalam menilai kelangsungan usaha auditee. Tujuan penelitian ini untuk menguji pengaruh kondisi keuangan perusahaan, kegagalan membayar hutang, opini audit tahun sebelumnya, reputasi auditor, dan lama perikatan audit terhadap kecenderungan penerimaan opini going concern. Populasi penelitian ini adalah perusahaan manufaktur yang terdaftar di Bursa Efek Indonesia tahun 2008-2010. Sampel sebanyak 28 perusahaan dipilih berdasarkan criteria yaitu perusahaan yang mengalami laba negatif. Selanjutnya data sekunder yang telah terkumpul dianalisis dengan regresi logistik. Hasil penelitian menunjukkan bahwa kegagalan membayar hutang dan opini audit tahun sebelumnya berpengaruh terhadap penerimaan opini going concern. Sebagaimana tercantum dalam PSA 30 bahwa debt default menjadi indikator penting sebelum auditor mengeluarkan opini going concern. Sementara kesulitan keuangan perusahaan, reputasi auditor dan lama perikatan audit tidak terbukti mempengaruhi kecenderungan penerimaan opini audit going concern.Kata kunci: opini going concern, kesulitan keuangan, gagal bayar, reputasi auditor, lama perikatan audit. PENDAHULUANMenurut Arens dan Loebbecke (1996), laporan audit penting sekali dalam suatu kegiatan audit atau proses atestasi. Hal tersebut dikarenakan laporan audit menginformasikan kepada pemakainya mengenai apa yang dilakukan auditor dan kesimpulan yang diperolehnya. Lebih jauh lagi, mereka mengungkapkan bahwa hasil akhir dari proses pemeriksaan oleh auditor adalah laporan audit yang merupakan alat komunikasi antara auditor dengan pihak pemakai

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Do companies successfully engage in opinion-shopping? Evidence from the UK

Cited by 313 publications

References 14 publications

Can Auditors be Independent? Experimental Evidence on the Effects of Client Type

Can Auditors be Independent? Experimental Evidence on the Effects of Client Type

Internal corporate governance mechanisms and audit quality: Evidence from GCC region

Pertimbangan Auditor Dalam Memberikan Opini Audit Going Concern

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