Current Search:  Auditing--Quality control (x)

View All Items

  • CSV Spreadsheet
(1 - 3 of 3)
role of asset reliability and auditor quality in equity valuation
Title
The role of asset reliability and auditor quality in equity valuation.
Creator
Fallatah, Yaser., Florida Atlantic University, Higgs, Julia
Abstract/Description
This paper brings together the auditor quality, asset reliability and firm valuation literatures by examining the role of auditor quality in equity valuation. The study broadly follows the Richardson et al. (2005) categorization of the reliability of accounting accruals of balance sheet components and conjectures that the role of auditor quality in equity valuation is more pronounced when asset reliability is not high. Auditor quality is measured using reputation, industry specialist and...
Show moreThis paper brings together the auditor quality, asset reliability and firm valuation literatures by examining the role of auditor quality in equity valuation. The study broadly follows the Richardson et al. (2005) categorization of the reliability of accounting accruals of balance sheet components and conjectures that the role of auditor quality in equity valuation is more pronounced when asset reliability is not high. Auditor quality is measured using reputation, industry specialist and tenure metrics. The underlying assumption is that auditor quality enhances the market's perception of firm value; as such, auditor quality may mitigate the cost of security mispricing documented by Richardson et al. (2005) for low or medium reliability accruals. The results of the study provide some support that high quality auditors contribute to the valuation of equity for assets. It is less clear as to whether the value is more pronounced for low or medium reliability assets.
Show less
Date Issued
2006
PURL
http://purl.flvc.org/fcla/dt/12231
Subject Headings
Auditing--Quality control, Econometrics, Investment analysis
Format
Document (PDF)
analysis of the impact of non-audit services on financial reporting quality: A test of two competing theories of auditor independence
Title
An analysis of the impact of non-audit services on financial reporting quality: A test of two competing theories of auditor independence.
Creator
Dickins, Denise., Florida Atlantic University, Skantz, Terrance R.
Abstract/Description
Auditor independence has been a long-standing issue for regulators resulting in numerous studies on the subject on how to enhance it and numerous rules that attempt to ensure it (e.g. Cohen Report 1978; ASR 250 1978; SEC Rule 2-01 2000). One of regulators' most recent attempts to shore up auditor independence is evident in the provisions of the Sarbanes-Oxley Act of 2002 (SOX). As a test of two competing theories of auditor independence, and to determine whether SOX mandates have successfully...
Show moreAuditor independence has been a long-standing issue for regulators resulting in numerous studies on the subject on how to enhance it and numerous rules that attempt to ensure it (e.g. Cohen Report 1978; ASR 250 1978; SEC Rule 2-01 2000). One of regulators' most recent attempts to shore up auditor independence is evident in the provisions of the Sarbanes-Oxley Act of 2002 (SOX). As a test of two competing theories of auditor independence, and to determine whether SOX mandates have successfully enhanced financial reporting quality, I examine post-SOX changes in non-audit fees (as a proxy for changes in quasi-rents) and the extent of changes in two measures of financial reporting quality. Results suggest that SOX mandates have been effective, and that the proposition of DeAngelo (1981b) that non-audit services may impair auditor independence may more-closely describe the relationship between changes in quasi-rents and changes in financial reporting quality than does the theory of Lee and Gu (1998). Further, supplemental analyses suggest that, as proposed by the theories, the amount of low-balling is positively related to the amount of quasi-rents.
Show less
Date Issued
2006
PURL
http://purl.flvc.org/fcla/dt/12195
Subject Headings
Auditors--Evaluation, Accounting--Standards--United States, Auditing--Standards--United States, Auditing--Quality control, Disclosure in accounting
Format
Document (PDF)
Can Priming a Firm’s Organizational Identity Overcome the Influences of National Culture on Auditor Judgment?
Title
Can Priming a Firm’s Organizational Identity Overcome the Influences of National Culture on Auditor Judgment?.
Creator
Killey, Michael, Higgs, Julia, Florida Atlantic University, College of Business, School of Accounting
Abstract/Description
A significant challenge faced by large auditing firms is offering consistent quality across the global network. Unfortunately, variation in judgments and decision-making, resulting from cultural differences, can undermine the provision of a uniform level of audit quality for these international firms. Previous research has determined that national culture influences an auditors’ professional judgments and decisions. Relying on Social Identity Theory, I explore whether inducing one’s...
Show moreA significant challenge faced by large auditing firms is offering consistent quality across the global network. Unfortunately, variation in judgments and decision-making, resulting from cultural differences, can undermine the provision of a uniform level of audit quality for these international firms. Previous research has determined that national culture influences an auditors’ professional judgments and decisions. Relying on Social Identity Theory, I explore whether inducing one’s organizational identification can both enhance auditor judgment and mitigate any deleterious impact that culture may have on the provision of a uniform level of audit quality. I also examine current cultural variations in auditor judgment in order to ensure that the results of earlier studies still typify the international auditing environment. National culture is assessed using two dimensions (individualism/collectivism, power distance) included in Hofstede’s 1980 cultural values framework. Participants from the United States are used to represent an individualistic/low power distance culture while individuals from India are used to represent a collectivistic/high power distance culture. Firms need mechanisms to elicit desired behaviors that may not be consistent with cultural tendencies in order to provide a uniform level of audit quality. Contrary to expectations, no significant differences are identified between the judgments of auditors from India and The United States. The results, however, do provide evidence that enhancing one’s organizational identification can impact certain professional judgments during the audit process. An association between national culture and auditor attitudes pertaining to client trust is also found. The implications of these findings for the professional auditing environment and future academic research are discussed.
Show less
Date Issued
2016
PURL
http://purl.flvc.org/fau/fd/FA00004736, http://purl.flvc.org/fau/fd/FA00004736
Subject Headings
Corporate governance., Corporations--Auditing., Auditing--Quality control., Identity (Psychology), Accounting--Moral and ethical aspects., Accounting--Professional ethics., Social responsibility of business.
Format
Document (PDF)