Audit Fees and Nonaudit Fees in the Governmental Sector PDF Download
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Author: Randal J. Elder
Publisher:
ISBN:
Category :
Languages : en
Pages : 22
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Book Description
We use a self-selection model to examine differences in audit fees between purchasers and non-purchasers of nonaudit services for a sample of 165 Michigan governmental units. Understanding the relationship between audit fees and nonaudit fees is important because nonaudit services potentially influence audit quality in the governmental sector. We find significant differences between purchasers and non-purchasers of additional services which influence audit fees. Purchasers of additional services have more audit adjustments and less experienced financial personnel than non-purchasers, suggesting that purchasers experience more accounting problems. Consistent with previous private sector research, we find a positive relationship between audit fees and nonaudit fees. Further analysis by auditor type suggests that the relationship between audit fees and nonaudit fees is negative for Big 6 auditors, but positive for other audit firms. This difference in the relationship between audit fees and nonaudit fees by auditor type may be due to differences in the nature of the consulting services demanded, or differences in the contractual arrangements for audit and nonaudit services.
Author: Randal J. Elder
Publisher:
ISBN:
Category :
Languages : en
Pages : 22
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Book Description
We use a self-selection model to examine differences in audit fees between purchasers and non-purchasers of nonaudit services for a sample of 165 Michigan governmental units. Understanding the relationship between audit fees and nonaudit fees is important because nonaudit services potentially influence audit quality in the governmental sector. We find significant differences between purchasers and non-purchasers of additional services which influence audit fees. Purchasers of additional services have more audit adjustments and less experienced financial personnel than non-purchasers, suggesting that purchasers experience more accounting problems. Consistent with previous private sector research, we find a positive relationship between audit fees and nonaudit fees. Further analysis by auditor type suggests that the relationship between audit fees and nonaudit fees is negative for Big 6 auditors, but positive for other audit firms. This difference in the relationship between audit fees and nonaudit fees by auditor type may be due to differences in the nature of the consulting services demanded, or differences in the contractual arrangements for audit and nonaudit services.
Author: Frankel Richard M
Publisher: Legare Street Press
ISBN: 9781019501573
Category :
Languages : en
Pages : 0
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Book Description
This groundbreaking study explores the relationship between auditors' fees for non-audit services and the quality of earnings reported by companies. Using data from a large sample of publicly traded firms, the authors show that there is a strong correlation between the two variables, and suggest that this could be a cause for concern for investors and regulators. The authors also provide recommendations for improving the transparency and reliability of financial reporting. This book is essential reading for anyone interested in the intersection of accounting, auditing, and corporate governance. This work has been selected by scholars as being culturally important, and is part of the knowledge base of civilization as we know it. This work is in the "public domain in the United States of America, and possibly other nations. Within the United States, you may freely copy and distribute this work, as no entity (individual or corporate) has a copyright on the body of the work. Scholars believe, and we concur, that this work is important enough to be preserved, reproduced, and made generally available to the public. We appreciate your support of the preservation process, and thank you for being an important part of keeping this knowledge alive and relevant.
Author: Richard M. Frankel
Publisher: Forgotten Books
ISBN: 9780666794659
Category : Business & Economics
Languages : en
Pages : 94
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Book Description
Excerpt from The Relation Between Auditors' Fees for Non-Audit Services and Earnings Quality This paper provides empirical evidence on the relation between non-audit services and earnings quality. We test hypotheses concerning: (1) the association between a firm's purchase of non-audit services from its auditor and earnings management, and (2) the stock price reaction to the disclosure of non-audit fees. In the past decade there has been a dramatic increase in the proportion of fee revenue auditors derive from non-audit services, yet we know little about how non-audit services are related to earnings quality.1 Concern about the effect of non-audit services on the financial reporting process was a primary motivation for the Securities and Exchange Commission (sec) to issue revised auditor independence rules on November 15, 2000. The rules require firms to disclose the amount of all audit and non-audit fees paid to its auditor. About the Publisher Forgotten Books publishes hundreds of thousands of rare and classic books. Find more at www.forgottenbooks.com This book is a reproduction of an important historical work. Forgotten Books uses state-of-the-art technology to digitally reconstruct the work, preserving the original format whilst repairing imperfections present in the aged copy. In rare cases, an imperfection in the original, such as a blemish or missing page, may be replicated in our edition. We do, however, repair the vast majority of imperfections successfully; any imperfections that remain are intentionally left to preserve the state of such historical works.
Author: P A Copley P a
Publisher: JAI Press
ISBN: 9780762301690
Category : Business & Economics
Languages : en
Pages : 256
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Book Description
The purpose of Research in Governmental and Nonprofit Accounting is to stimulate and report high-quality research on a wide range of governmental and nonprofit accounting issues. A number of papers appearing in Volume 10 differ from much of our existing empirical work. The Bento and White and Copley and Seay studies use time-series data over relatively long intervals. In the case of the Sneed and Sneed and Elder, Kattelus, and Douthett studies, the authors use methodologies which have not been employed in previous studies in either the public or private sector. To the extent that these methodologies permit investigation of previously unexplored issues, the papers will be of interest to researchers outside of the governmental and nonprofit area. Governmental and nonprofit accounting represents an undeveloped research area which would benefit from rigorous examination. The government and not-for-profit sectors are also becoming increasingly attractive research areas. There are new standards of reporting for not-for-profit entities and a proposal for a dramatic change in state and local government financial statements. Change is always an opportunity for new research. As evidenced by the Forgione chapter, data exists and is becoming increasingly available.
Author: New Zealand. Office of the Auditor-General
Publisher:
ISBN: 9780478383102
Category : Auditors
Languages : en
Pages : 17
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Book Description
Author: Masdiah Abdul Hamid
Publisher: LAP Lambert Academic Publishing
ISBN: 9783843394666
Category :
Languages : en
Pages : 172
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Book Description
The purpose of this study is to examine the association between fees, board of directors and audit committee characteristics of 191 government linked companies (GLCs) and non-government linked companies (Non-GLCs). Audit tenure was included in order to see the impact of fees paid on the auditor independence. It is hypothesised that corporate governance practices does not affected the auditor's assessment, resulting no affect on the fees payment. A sample of 191 listed GLCs and non-GLCs are used that across three years in 2006 to 2008. Multiple regression analysis was used to estimate the relationship proposed in the hypotheses.
Author: Michael E. Bradbury
Publisher:
ISBN:
Category :
Languages : en
Pages : 38
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Book Description
The outsourcing of public sector audits to private sector auditors is an important public sector issue. This paper addresses the existence of an audit brand name premium in the public sector by comparing audit fees between the government auditor and Big 5 auditors. I also examine whether audit premiums exist for Big 5 industry, national and city specialists. The study contributes to prior research by (1) statistically adjusting for self-selection bias, and (2) allowing slope coefficients in the audit fee model to vary between the Big 5 and the government audit sector and estimating the counterfactual fee (i.e., the expected fee using the alternative auditor fee model). The Big 5 premium is around 23 percent. However, this depends on whether the Big 5 auditor is an industry specialist. An industry specialist passes on a discount of 17.4 percent to the client. There is no premium related to being a national leader. The evidence is mixed as to whether city specialists command an audit fee premium.
Author: Richard M. Frankel
Publisher:
ISBN:
Category : Auditing
Languages : en
Pages : 44
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Book Description
We examine the association between the provision of non-audit services and earnings quality. Because of concerns regarding the effect of non-audit services on financial reporting credibility, the Securities and Exchange Commission recently issued revised auditor independence rules requiring firms to disclose in their annual proxy statement the amount of fees paid to auditors for audit and non-audit services. Using data collected from proxy statements filed between February 5, 2001 and June 15, 2001, we present evidence that firms purchasing more non-audit services from their auditor are more likely to just meet or beat analysts' forecasts and to report larger absolute discretionary accruals. However, the purchase of non-audit services is not associated with meeting other earnings benchmarks. We also find that the unexpected component of the non-audit to total fee ratio is negatively associated with stock returns on the filing date. These results are consistent with arguments that the provision of non-audit services strengthens an auditor's economic bond with the client and that investors price this effect. Keywords: Auditor independence; Auditor fees; Earnings management; Discretionary accruals. JEL Classification: G12, M41, M43, M49, L84.
Author: United States Government Accountability Office
Publisher: Lulu.com
ISBN: 0359536395
Category : Reference
Languages : en
Pages : 234
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Book Description
Audits provide essential accountability and transparency over government programs. Given the current challenges facing governments and their programs, the oversight provided through auditing is more critical than ever. Government auditing provides the objective analysis and information needed to make the decisions necessary to help create a better future. The professional standards presented in this 2018 revision of Government Auditing Standards (known as the Yellow Book) provide a framework for performing high-quality audit work with competence, integrity, objectivity, and independence to provide accountability and to help improve government operations and services. These standards, commonly referred to as generally accepted government auditing standards (GAGAS), provide the foundation for government auditors to lead by example in the areas of independence, transparency, accountability, and quality through the audit process. This revision contains major changes from, and supersedes, the 2011 revision.
Author: David M. Walker
Publisher: DIANE Publishing
ISBN: 9780756724665
Category : Business & Economics
Languages : en
Pages : 56
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Book Description
This amendment substantially changes the previous standard to better serve the public interest and to maintain a high degree of integrity, objectivity, and independence for audits of government entities. While this new amendment deals with a range of auditor independence issues, the most significant change relates to the rules associated with non-audit, or consulting services. Included as Appendix I is a version of the standard which shows the deletion of language appearing in the 1994 Yellow Book with a strikeout, and presents the new or amended language with bold and italics. Also contains a list of members of the Comptroller General's Advisory Council on Government Auditing Standards.
