The impact of voluntary audit and governance characteristics on accounting errors in private companies

Small is big! The role of ‘small’ audits for studying the audit market

“…So far, prior research examining the potential bene ts derived from voluntary audits has been restricted to its impact on debt contracting and on nancial information quality (Kim, Simunic, Stein, & Yi, 2011;Minnis, 2011;Clatworthy & Peel, 2013;Kausar, Shro , & White, 2016). Voluntary audits facilitate debt contracting for two reasons.…”

“…It is argued that an external audit improves the quality and credibility of the accounts, thereby the informative value of nancial statements for third parties. While this argument is generally taken for granted, there is limited empirical evidence of the bene cial e ect of voluntary audits on accounting quality, where Dedman and Kausar (2012) and Clatworthy and Peel (2013) constitute two major exceptions. Dedman and Kausar (2012) show that voluntary audits are associated with less conservative nancial reporting.…”

“…Dedman and Kausar (2012) show that voluntary audits are associated with less conservative nancial reporting. Clatworthy and Peel (2013) found out that audited nancial statements of private rms are nearly half as likely as unaudited accounts to contain accounting errors.…”

Research in auditing: main themes

“…Finally, the last theme is socio-economic data of the company, which presents papers assessing the economic and social aspects of the companies, whether public, private, or nonpro t. For example, its size, family companies, company age, operational complexity, pay higher wages, location, insolvency, company value, and classi cation aspects as public, private, and nonpro t (Carson & Fargher, 2007;Choi, Kim, Qiu, & Zang, 2012;Clatworthy & Peel, 2013;Humphrey & Miller, 2012;Vermeer, Edmonds, & Asthana, 2014). A new theme not previously identi ed, showing its signi cance in the eld (19.5%).…”

Kurumsal Yönetim Kapsamında Finansal Raporlamanın Güvenirliliği: Türkiye’den Örnek Olay

“…Ghosh and Lee (2013) find that for the pre-disclosure period, firms financial reporting internal control weaknesses under SOA, had structural problems and had low financial reporting quality. Clatworthy and Peel (2013) examine the relationship between audit and corporate governance characteristics of companies. Their findings shed light on the effects of companies' governance characteristics on the reliability of their financial accounting information.…”