The Big 4 premium: Does it survive an auditor change? Evidence from Europe

Fleischer, Rouven; Goettsche, Max; Schauer, Maximilian

doi:10.1016/j.intaccaudtax.2017.10.002

Cited by 8 publications

(10 citation statements)

References 46 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…The latter study finds that, while there is no significant change in audit fees following a rotation of a non‐Big 4 firm, the total audit fees become lower following a rotation of a Big 4 firm. This result is in line with the finding of Fleischer et al (2017) that indicates that the Big 4 firms are willing to accept lower fees to attract new clients.…”

Section: Independent Audit Oversight and Audit And Non‐audit Feessupporting

confidence: 91%

“…This result is in line with the finding of Fleischer et al (2017) that indicates that the Big 4 firms are willing to accept lower fees to attract new clients.…”

Section: Effects On Audit Feessupporting

confidence: 90%

“…This paper provides evidence suggesting that differences in the PCAOB inspections frequency are likely to result in improved audit quality, with a significant increase in audit fees for clients of non-Big 4 audit firms that are inspected annually as compared to those inspected triennially. In Europe, while some studies (e.g., André et al, 2016;Cameran et al, 2015;Ratzinger-Sakel & Schönberger, 2015) find no association between mandatory audit rotation and both audit fees and quality, other studies (i.e., Corbella et al, 2015;Fleischer et al, 2017) show evidence of a positive association between quality of audit and mandatory audit rotation. The latter study finds that, while there is no significant change in audit fees following a rotation of a non-Big 4 firm, the total audit fees become lower following a rotation of a Big 4 firm.…”

Section: Effects On Audit Feesmentioning

confidence: 97%

“…In Europe, while some studies (e.g., André et al, 2016; Cameran et al, 2015; Ratzinger‐Sakel & Schönberger, 2015) find no association between mandatory audit rotation and both audit fees and quality, other studies (i.e., Corbella et al, 2015; Fleischer et al, 2017) show evidence of a positive association between quality of audit and mandatory audit rotation. The latter study finds that, while there is no significant change in audit fees following a rotation of a non‐Big 4 firm, the total audit fees become lower following a rotation of a Big 4 firm.…”

Section: Independent Audit Oversight and Audit And Non‐audit Feesmentioning

confidence: 99%

See 3 more Smart Citations

Independent oversight of the auditing profession: A review of the literature

2021

View full text Add to dashboard Cite

This paper reviews the literature on the independent oversight of auditing from 2003 to 2018 and provides several research opportunities for filling the identified gaps in that literature. Our review classifies the literature into three themes: (1) the development of independent audit oversight, (2) the effects of independent audit oversight and (3) the interface between the independent audit oversight authorities and the global audit networks. The paper finds different effects of the independent audit oversight. Positively, it enhances the capital markets by adding more credibility to the published information. Auditors become more conservative about accepting or continuing to work with high‐risk clients. At the same time, while audit fees have increased as a result of the additional requirements of independent audit regulation, non‐audit fees from audit clients have decreased significantly. Negatively, independent oversight has increased audit concentration and resulted in insufficient choice of auditors in most audit markets.

show abstract

Section: Independent Audit Oversight and Audit And Non‐audit Feessupporting

confidence: 91%

“…This result is in line with the finding of Fleischer et al (2017) that indicates that the Big 4 firms are willing to accept lower fees to attract new clients.…”

Section: Effects On Audit Feessupporting

confidence: 90%

Section: Effects On Audit Feesmentioning

confidence: 97%

Section: Independent Audit Oversight and Audit And Non‐audit Feesmentioning

confidence: 99%

See 2 more Smart Citations

Independent oversight of the auditing profession: A review of the literature

2021

View full text Add to dashboard Cite

show abstract

“…Following Armstrong, Jagolinzer, and Larcker (), we match treated to untreated firms using a propensity score matching (PSM) technique based on industry (two‐digit sic‐code), size (logarithm of total assets), and the year of the first IR issuance per company (2013 or 2014) with a caliper of 0.001 for the neighbor approach. We match every treated firm to a single nontreated firm, following Almeida, Campello, Laranjeira, and Weisbenner (); Hong, Paik, and Smith (); Franzen and Weißenberger (); and Fleischer, Goettsche, and Schauer (). This first procedure results in a total amount of 4,094 firm‐observations over the 8 years (2009 to 2016).…”

Section: Methodsmentioning

confidence: 99%

Integrated reporting and capital markets in an international setting: The role of financial analysts

et al. 2019

View full text Add to dashboard Cite

This study investigates the interplay between integrated reporting (IR) and capital markets. In particular, building on voluntary disclosure and information processing theories, we hypothesize and empirically find that IR adoption improves analysts' ability to make accurate earnings forecasts. Whereas previous studies focus on the South African context, we rely on an international sample that also allows us to study the moderating effect of the corporate governance regime (shareholder or stakeholder oriented). The results suggest that IR improves analysts' ability to make accurate predictions to a larger extent in North America than in Europe, and we derive interesting insights on the much‐debated nature of IR. This study offers valuable insights to policy makers interested in improving disclosure practices in the financial market.

show abstract

Governance structures and the compensation of powerful corporate leaders in financial firms during M&As

Agyei‐Boapeah

Ntim

Fosu

2019

Journal of International Accounting, Auditing and Taxation

View full text Add to dashboard Cite

We examine the impact of mergers and acquisitions (M&As) on the compensation of powerful corporate leaders [i.e., boards of directors, including Chief Executives Officers (CEOs), Chief Financial Officers (CFOs), and Board Chairs] of acquiring firms. Using one of the largest datasets on M&As, directors' compensation, and governance to-date, consisting of a sample of UK financials (banks, insurance firms, private equity firms, and speciality finance firms) over a 13-year period, our results obtained by employing multivariate regression analyses show that acquisitions, on average, have a positive and significant impact on directors' compensation. This effect applies to both powerful corporate executives (CEOs, CFOs, and all other executive directors) and other non-executive directors.However, the positive acquisition effect on top executive compensation is much higher in larger and more complex acquisitions. We also find that much of the acquisition-related pay raises is equity-based rather than cash-based. Finally, we find CEOs to be the top beneficiaries from acquisitions. We interpret our findings within a multi-theoretical framework that draws insights from agency, executive power, managerial talent, and tournament theories of top executive compensation.

show abstract

The Big 4 premium: Does it survive an auditor change? Evidence from Europe

Cited by 8 publications

References 46 publications

Independent oversight of the auditing profession: A review of the literature

Independent oversight of the auditing profession: A review of the literature

Integrated reporting and capital markets in an international setting: The role of financial analysts

Governance structures and the compensation of powerful corporate leaders in financial firms during M&As

Contact Info

Product

Resources

About