Trusting/Distrusting Auditors’ Opinions

Rodgers, Waymond; Guiral, Andrés; Gonzalo, José A.

doi:10.3390/su11061666

Cited by 8 publications

(17 citation statements)

References 86 publications

(115 reference statements)

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“…This result suggests that when labor unions exist, firms are more likely to select industry specialist auditors when they change external auditors. In column (2), the unionization rate (UNIONRATE) is significantly positive (coefficient 0.317, t-value 1.76; coefficient 0.719, t-value 2.31, respectively), which is consistent with the result of column (1).…”

Section: Resultssupporting

confidence: 79%

“…As market participants rely on financial information provided by firms, they demand effective monitoring associated with the quality of financial reporting. External auditors play the most important role in corporate monitoring by providing independent and professional assurance services for financial reporting (Rodgers et al [1]). This service reduces the information asymmetry between the users and providers of financial information.…”

Section: Introductionmentioning

confidence: 99%

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The Role of Labor Unions in Corporate Transparency: Focusing on the Role of Governance in Auditor Change Process

2019

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This study investigates how the presence and power of labor unions are associated with auditor replacement, more specifically, external auditor tenure and the direction of auditor change. External auditor tenure and direction have been of great interest to stakeholders, as they are very likely associated with the financial reporting quality and corporate transparency, crucial factors for sustainable business. We are focusing on the role of the labor union, one of the key stakeholders involved in corporate governance and transparent operations, in external auditor selection processes. During the annual wage bargaining process, labor unions that rely on financial information face information asymmetry because financial statements are provided by the management. Therefore, labor unions have a high demand for independent and capable external auditors. This demand is likely to shorten auditor tenure and/or prompt changes to higher-quality auditors. Using a sample of 4568 firm-years listed in the Korean stock markets for the period of 2005 to 2008, we find evidence that the presence and power of labor unions significantly decrease external auditor tenure. We also find that the direction of auditor changes with the presence and power of labor unions is likely from non-industry specialist auditors to industry specialist auditors. This study contributes to the extant literature by extending the previous research on auditor selection and the governance role of labor unions.

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Section: Resultssupporting

confidence: 79%

Section: Introductionmentioning

confidence: 99%

The Role of Labor Unions in Corporate Transparency: Focusing on the Role of Governance in Auditor Change Process

2019

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“…In certain cases, the auditor's report content may be modified as detailed in ISA 700 [61,53,54]. The modification of report may be done either by appending an emphasis of matter paragraph or another matters paragraph while the auditor's opinion is still unmodified (unqualified), or by modifying an opinion, in cases in which an auditor alter his/her opinion to qualified or adverse, or issues a disclaimer opinion [114,115]. The International Auditing and Assurance Standard Board [55] proclaims that in certain situations, an auditor needs to modify his/her opinion in the audit report.…”

Section: Audit Opinion In Jordanmentioning

confidence: 99%

Impact of Ownership Characteristics on Modified Audit Opinion in Jordan

Alkilani¹,

Hussin²,

Salim³

2019

IJAFRM

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It is well established that ownership characteristics are impacted by the quality of financial reporting. The purpose of this work is to examine the role of ownership characteristics in minimising the prospect of corporates obtaining a modified audit opinion in Jordan. Three ownership characteristics [family ownership (FAOWN), institutional ownership (INOWN) and foreign ownership (FAOWN)] and modified audit opinion were studied. The study used 117 samples of corporates listed on the Amman Stock Exchange (ASE). Logistic regression was employed to analyse the association between the modified audit opinions as a dependent variable and ownership characteristics as independent variables. Ownership characteristics are anticipated to be more successful in improving the quality of financial statement, and thus, reduce the prospect of firm obtaining a modified audit opinion. The analysed results from 2012 to 2016 periods of these corporates in Jordan showed that FAOWN and FOOWN validated this projection. Interestingly, the effect of family and FOOWN improve the quality of financial statement, thereby, reduce the cases of a modified audit opinion. Additionally, the study could not find any association impact between the INOWN and modified audit opinion.

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“…TM was previously used to investigate the different lending issues assessed by commercial loan officers (Rodgers [101]). Moreover, other studies have implemented the TM in business ethics (Rodgers and Gago [102]) and auditing (Rodgers et al [103]; Rodgers and Al Fayi [2]), organizational behavior (Foss and Rodgers [104]), sexual harassment (Culbertson and Rodgers [105]) and tax compliance (O'Shaughnessy [106]). Moreover, Ishaque [107] indicated how the Throughput Model is useful when integrated with social cognitive theory.…”

Section: The Throughput Modelmentioning

confidence: 99%

“…The findings highlight that individuals' different perceptions and judgments, as well as information signals can lead to different reporting lines (decision choices). The advantages of the TM are that it provides a structure of different factors impacting individuals' decision-making (Rodgers [99]; Rodgers et al [103]). Further, TM encapsulates algorithms "deep learning," which is a technology that strives to imitate the human brain.…”

Section: The Throughput Modelmentioning

confidence: 99%

Sustainability and Firm Performance: A Review and Analysis Using Algorithmic Pathways in the Throughput Model

2019

Self Cite

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This paper reviews the prior research on the relationship between sustainability and a firm’s performance and proposes algorithmic pathways in the throughput model that could be used to improve the research findings for such research. Results of our literature search were mixed. Some studies reported a positive relationship between a firm’s sustainability efforts and profitability while others found a negative to no relationship. Studies found reasons for implementing sustainability even though it is a loss-bearing activity; other studies found reasons for not practising sustainability. Reasons for not practising sustainability ranged from absence of external pressure; not viewing the sustainability report as a business obligation; deeming it too expensive for small firms; to a lack of resources. Our evaluation of the prior research also found that the prior studies excluded an important class of assets—non-financial intangible assets—in their evaluation of the relationship between sustainability efforts and profitability. The contribution of this study is that the throughput model along with its six dominant algorithms depicts the significance of triple bottom line concepts of economic, social, and environmental variables influencing performance.

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Trusting/Distrusting Auditors’ Opinions

Cited by 8 publications

References 86 publications

The Role of Labor Unions in Corporate Transparency: Focusing on the Role of Governance in Auditor Change Process

The Role of Labor Unions in Corporate Transparency: Focusing on the Role of Governance in Auditor Change Process

Impact of Ownership Characteristics on Modified Audit Opinion in Jordan

Sustainability and Firm Performance: A Review and Analysis Using Algorithmic Pathways in the Throughput Model

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