... passed on to clients. This study documents a positive relation between the infrequency of Big-R restatements of financial statements across an audit office’s portfolio of publicly traded clients (which proxies for effectiveness) and lower audit fees (which proxies for efficiency), ceteris...

... note: Accepted by Linda A. Myers, under the Senior Editorship of Jayanthi Krishnan. 06 08 2021 23 03 2024 29 04 2024 2024 air pollution audit quality financial reporting quality misstatements restatements AUDITING: A JOURNAL OF PRACTICE & THEORY Vol. XX, No. XX...

... reporting quality restatements We use the existence of an accounting misstatement and the misstatement’s severity as proxies for financial reporting quality. Although accounting misstatements are infrequent, they clearly reflect poor financial reporting quality and are directly influenced...

...Anwer S. Ahmed; Bilal Al-Dah; Moataz El-Helaly; Krzysztof Fleszar SUMMARY We provide evidence on the efficacy of Auditing Standard No. 18 (AS18) for auditing-related party transactions (RPTs). We measure audit quality using general restatements and RPT-related restatements. Using a sample of S...

... fees as a variable of interest but also show the same issue manifests for other measures that respond to the restatement of misstated financial statements (i.e., internal control material weaknesses and auditor changes). We conclude by discussing alternative approaches for controlling for ex...

.... Results indicate that auditors respond to this signal by charging higher fees and delaying the release of the audit report, which in combination suggest greater audit effort. Further, this signal reflects actual misstatement risk in the form of subsequent restatements, but audit effort mitigates this risk...

.... Finally, when the AC is less effective, all of its members receive lower support, irrespective of their expertise or position within the committee. director elections audit committee financial expertise internal controls restatements We thank Jean C. Bedard, David Hay, Colin Reid, Chad...

... and the likelihood of the clients restating financial statements as proxies for audit quality, we do not find that the small auditors that exited the market for SEC client audits were of lower quality than successor small audit firms that did not exit the market. JEL Classifications: G18; L51. Data Availability...

... with nonmarket-based or undisclosed pricing policy and related sales above the industry average. Second, RPTMAO has robust predictive power for future RPT-related restatements, and the predictive power is greater than that of modified opinions that do not specifically discuss RPTs, suggesting that the auditor...

... accruals and are less likely to have financial restatements and material internal control weaknesses. Further results show that larger social networks are associated with higher audit quality, which translates into higher audit fees. The results are robust to a variety of alternative specifications...

... to the incremental auditor effort attributed to ASR, we find that, prior to the GFC, the incremental audit effort by Big N auditors, but not by non-Big N auditors, reduced the likelihood of subsequent restatements and constrained reported gains on securitizations. JEL Classifications: G14; G21; M42. © 2018...

... Willekens, under the Senior Editorship of Jeffrey R. Cohen. November 2015 January 2017 © 2017 American Accounting Association. All rights reserved. 2017 audit quality internal controls SOX 404(b) restatements material weakness We examine whether the effectiveness...

...Yanyan Wang; Lisheng Yu; Yuping Zhao SUMMARY We study whether audit-partner quality influences the probability of annual report misstatements (measured by restatements) and whether various levels of quality control attenuate such influences. We measure audit-partner quality with audit failure rate...

...Alan I. Blankley; David N. Hurtt; Jason E. MacGregor SUMMARY: We investigate the relationship between future financial statement restatements and audit report lags. Audit report lags are defined as the number of days between the fiscal year-end and the date of the audit report. Ex ante...

...Nathan J. Newton; Dechun Wang; Michael S. Wilkins SUMMARY: We examine the relationship between auditor competition and the likelihood of financial restatements that occur as a result of failures in the application of generally accepted accounting principles (GAAP). Policy makers and audit market...

...Alan I. Blankley; David N. Hurtt; Jason E. MacGregor SUMMARY We investigate the relationship between audit fees and subsequent financial statement restatements in the years following the Sarbanes-Oxley Act of 2002 (SOX). After controlling for internal control quality , we find that abnormal audit...