Questioning the Big 4 Audit Quality Assumption: New Evidence from Malaysia

Carlin, Tyrone M.; Finch, Nigel; Laili, Nur Hidayah

doi:10.2139/ssrn.1280790

Cited by 8 publications

(5 citation statements)

References 24 publications

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“…In accordance with prior literature, we suggest that larger audit companies may be more proactive regarding fiscal transparency (Carlin et al, 2009;Fuerman, 2004). Indeed, size is generally associated with audit quality.…”

Section: Normative Isomorphism: the Auditing Professionsupporting

confidence: 90%

Coercive, normative, and mimetic isomorphisms as drivers of corporate tax disclosure

Depoers

Jérôme

2019

JAAR

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Purpose International Accounting Standard (IAS) 12 requires the disclosure of a tax reconciliation (TR). The purpose of the TR is to explain the differences between the corporate effective tax expense and the corporate theoretical tax expense. In this paper, the authors investigate which institutional pressures influence the level of disclosure of the TR. Design/methodology/approach The study draws on an empirical archival approach in which the level of disclosure is first measured and then associated with institutional pressures. The sample comprises 120 companies listed on the Paris stock exchange, i.e. a highly institutionalized setting. Findings The findings show a wide variation in the level of disclosure of the TR across the sample and that all three types of isomorphism (coercive, normative and mimetic) are associated with disclosure. Research limitations/implications The paper deals exclusively with TR given its importance to a wide range of users. Additional tax information available in annual reports, most of the time at an expert level, may be the subject of further research. Practical implications The results have important implications for standard setters, regulators, and practitioners as the research outlines the institutional pressures at work in corporate reporting policies and pushes forward the debate on fiscal transparency. Originality/value This paper documents the influence of institutional pressures on the level of the TR disclosure at a country level. It contributes to the literature on corporate tax disclosure which mainly focuses on differences across countries. An innovative ad hoc index is used to measure information completeness.

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Section: Normative Isomorphism: the Auditing Professionsupporting

confidence: 90%

Coercive, normative, and mimetic isomorphisms as drivers of corporate tax disclosure

Depoers

Jérôme

2019

JAAR

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“…Early evidence on technical compliance suggests that in many cases, Australian preparers and auditors have been found wanting in the face of these challenges, with surprising rates of non-compliance with the requirements of new applicable accounting standards, and frequently poor disclosure standards (Carlin and Finch, 2008b). Similar results have been generated in studies of jurisdictions other than Australia undergoing the transition to IFRS-based reporting (Carlin et al, 2008(Carlin et al, , 2009. However, these studies drew upon data observations only relating to the first year in which sample firms reported pursuant to IFRS.…”

Section: Jaoc 62mentioning

confidence: 72%

Resisting compliance with IFRS goodwill accounting and reporting disclosures

Carlin¹,

Finch²

2010

Journal of Accounting &Amp; Organizational Change

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Purpose -The purpose of this paper is to report the findings of a study designed to understand the extent of compliance with the goodwill accounting and reporting disclosure requirements under AASB 136 among a sample of goodwill intensive Australian firms over the first two years of their IFRS adoption. Design/methodology/approach -Examining the goodwill reporting practices adopted by a sample of 50 large Australian listed firms, which disclosed the existence of goodwill in each of the first two years in which they produced financial statements pursuant to IFRS. The quality and technical accuracy of the goodwill disclosures produced by these organisations together with an assessment of evidence of variation in these over time provides an evidentiary basis for analysis. Findings -The paper finds continued high levels of non-compliance with the goodwill accounting standard suggesting that a viable organisational option in the face of change is to fail to take steps to comply. This organisational response undermines the assumptions of consistency and comparability as key qualitative characteristics under IFRS. Originality/value -The focal question pondered pertains to the nature of organisational responses to changes such as those brought about by continued development and reform of financial reporting standards. This is a question with potentially significant implications for a range of stakeholders including auditors, financial analysts, regulators and report users.

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“…A intensidade da contribuição da firma de auditoria é mensurada por meio da qualidade da auditoria. Tal qualidade é proporcional a maior competência e independência do auditor, (DeAngelo, 1981;Leftwich, Watts & Zimmerman, 1981;Ito, Niyama & Mendes, 2008;Defond & Zhang, 2014) essa traduzida pela iniciativa do profissional em relatar ao mercado as inconformidades percebidas (DeAngelo, 1981;Francis, 2004;Carlin, Finch & Laili, 2009). Características específicas das companhias, assim como seu sistema informacional, se relacionam com a qualidade da auditoria (DeFond & Zhang, 2014).…”

Section: Introductionunclassified

Percepção De Confiança Na Auditoria Independente: Índice De Qualidade

Sant’Ana

Sant'Ana²

2021

Contab. Vista & Rev.

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A Auditoria Independente representa uma atividade complexa uma vez que envolve fatores internos e externos à auditada assim como características do auditor. Ao considerar tamanha complexidade este trabalho foi realizado com o objetivo de criar um Índice de Qualidade de Auditoria - IQUA 2019. A construção de um índice mostra-se importante para que seja possível compreender os fatores que influenciam na qualidade da auditoria, assim como obter uma percepção das companhias e dos anos nas quais a qualidade foi mais evidente. A composição aconteceu por meio da apreciação de aspectos qualitativos do trabalho do auditor e fatores internos e externos à auditada, tais como: tamanho da firma de auditoria; auditoria, representada pela variação na qualidade do serviço prestado entre as firmas de auditoria; tempo de relacionamento auditor-cliente; especialização; comitê de auditoria; risco, honorários e conservadorismo. Foi utilizada a regressão múltipla com dados em painel, estimada por meio do método dos momentos generalizado (GMM), justificado pela possibilidade de endogeneidade entre as variáveis. A utilização do GMM mostra-se relevante uma vez observada a dificuldade em estudos empíricos de auditoria em se inferir uma relação de causa e efeito entre as variáveis. As variáveis selecionadas foram significativas, o que representa que quanto maior o tamanho da firma, o tempo de relacionamento, a especialização, a alavancagem financeira, os honorários e a precaução com que notícias positivas são contabilizadas, em detrimento das ruins, maior a qualidade de auditoria. O fato da companhia possuir comitê tratou-se de um indício para o incremento da qualidade da auditoria.

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Questioning the Big 4 Audit Quality Assumption: New Evidence from Malaysia

Cited by 8 publications

References 24 publications

Coercive, normative, and mimetic isomorphisms as drivers of corporate tax disclosure

Coercive, normative, and mimetic isomorphisms as drivers of corporate tax disclosure

Resisting compliance with IFRS goodwill accounting and reporting disclosures

Percepção De Confiança Na Auditoria Independente: Índice De Qualidade

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