The Experts below are selected from a list of 7602 Experts worldwide ranked by ideXlab platform
K Ramesh - One of the best experts on this subject based on the ideXlab platform.
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the unintended consequences of pcaob Auditing Standard nos 2 and 3 on the reliability of preliminary earnings releases
Journal of Accounting and Economics, 2011Co-Authors: Scott N Bronson, Chris E Hogan, Marilyn F Johnson, K RameshAbstract:Implementation of Public Company Accounting Oversight Board Auditing Standards No. 2 on internal control and No. 3 on documentation has delayed audit completion. However, due to market demand for timely disclosures, most firms maintain the same preliminary earnings release date even though the audit may not be complete as of that date. Results indicate revisions to preliminary announcements when filing the 10-K report would have been 35% lower during 2005 if the historical frequency of issuing earnings releases after the audit report date had not changed. Additionally, stock market reaction to impending revisions suggests lower reliability of preliminary earnings.
K K Raman - One of the best experts on this subject based on the ideXlab platform.
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The SOX 404 control audit and the effectiveness of additional audit effort in lowering the risk of financial misstatements
Review of Quantitative Finance and Accounting, 2019Co-Authors: Chan Li, K K Raman, Lili Sun, Rong YangAbstract:We examine the effectiveness of additional audit effort in lowering the risk of financial misstatements for companies with internal control material weaknesses during three separate post-SOX time periods. Our findings suggest that additional audit effort (as proxied by abnormal audit fees) is effective in lowering the risk of financial misstatements for clients with weak internal controls during the Auditing Standard No. 2 regime (2004–2006), but not during the extant Auditing Standard No. 5 (AS5) regime or the earlier 2002–2004 pre-404 audit (but still post-SOX) time period. We contribute to the on-going debate about the potential benefits associated with the SOX 404 audit and, in particular, the emerging literature on the effectiveness, or lack thereof, of the SOX 404 audit in improving the assessment of control risk under the extant AS5 regime (Schroeder and Shepardson in Account Rev 91(5):1513–1541, 2016 ). Collectively, our findings are consistent with the notion that extant PCAOB concerns about internal control quality under AS5 may be valid.
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the effect of ambiguity in an Auditing Standard on auditor independence evidence from nonaudit fees and sox 404 opinions
Journal of Contemporary Accounting & Economics, 2017Co-Authors: K K Raman, Lili SunAbstract:Abstract We examine the relation between nonaudit fees and SOX 404 opinions on the effectiveness of a client’s internal control over financial reporting. We find a negative association between nonaudit fees and the auditor’s propensity to issue an adverse SOX 404 opinion during 2004–2006 (when AS2 was the applicable Standard), but not in 2007 or 2008 (when AS5 was the applicable Standard). Our results hold when we control for office size and time trend and examine tax and nontax nonaudit fees separately. These findings suggest that AS5 reduced ambiguity relative to AS2 and improved auditor independence. Our paper contributes to two literature streams: (1) the sparse literature on the adverse effects associated with ambiguity (lack of precision) in an Auditing Standard ( Willekens and Simunic, 2007 , Ye and Simunic, 2013 ), and (2) the AS5 literature by documenting that AS5 contributed to a more effective audit via greater auditor independence.
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the sox 404 internal control audit key regulatory events
Research in Accounting Regulation, 2015Co-Authors: Chan Li, K K Raman, Da WuAbstract:Section 404b of the 2002 Sarbanes–Oxley Act (SOX) requires auditors to attest to the effectiveness of a client's internal control over financial reporting (ICFR). In this paper, we provide an overview of key regulatory events in the implementation of the 404 internal control audit. We discuss the early years (under Auditing Standard No. 2) as well as the later years (under Auditing Standard No. 5) of the 404 audit, emphasizing areas of improvement in the efficiency and effectiveness of the audit as well as the remaining problems and challenges highlighted in PCAOB inspection reports and practice alerts. Finally, we address recent regulatory developments pertinent to the 404 audit such as Auditing Standard No. 12 and the recent 2013 update to the Committee of Sponsoring Organizations of the Treadway Commission's (COSO) internal control framework.
Chan Li - One of the best experts on this subject based on the ideXlab platform.
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The SOX 404 control audit and the effectiveness of additional audit effort in lowering the risk of financial misstatements
Review of Quantitative Finance and Accounting, 2019Co-Authors: Chan Li, K K Raman, Lili Sun, Rong YangAbstract:We examine the effectiveness of additional audit effort in lowering the risk of financial misstatements for companies with internal control material weaknesses during three separate post-SOX time periods. Our findings suggest that additional audit effort (as proxied by abnormal audit fees) is effective in lowering the risk of financial misstatements for clients with weak internal controls during the Auditing Standard No. 2 regime (2004–2006), but not during the extant Auditing Standard No. 5 (AS5) regime or the earlier 2002–2004 pre-404 audit (but still post-SOX) time period. We contribute to the on-going debate about the potential benefits associated with the SOX 404 audit and, in particular, the emerging literature on the effectiveness, or lack thereof, of the SOX 404 audit in improving the assessment of control risk under the extant AS5 regime (Schroeder and Shepardson in Account Rev 91(5):1513–1541, 2016 ). Collectively, our findings are consistent with the notion that extant PCAOB concerns about internal control quality under AS5 may be valid.
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the sox 404 internal control audit key regulatory events
Research in Accounting Regulation, 2015Co-Authors: Chan Li, K K Raman, Da WuAbstract:Section 404b of the 2002 Sarbanes–Oxley Act (SOX) requires auditors to attest to the effectiveness of a client's internal control over financial reporting (ICFR). In this paper, we provide an overview of key regulatory events in the implementation of the 404 internal control audit. We discuss the early years (under Auditing Standard No. 2) as well as the later years (under Auditing Standard No. 5) of the 404 audit, emphasizing areas of improvement in the efficiency and effectiveness of the audit as well as the remaining problems and challenges highlighted in PCAOB inspection reports and practice alerts. Finally, we address recent regulatory developments pertinent to the 404 audit such as Auditing Standard No. 12 and the recent 2013 update to the Committee of Sponsoring Organizations of the Treadway Commission's (COSO) internal control framework.
Rong Yang - One of the best experts on this subject based on the ideXlab platform.
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The SOX 404 control audit and the effectiveness of additional audit effort in lowering the risk of financial misstatements
Review of Quantitative Finance and Accounting, 2019Co-Authors: Chan Li, K K Raman, Lili Sun, Rong YangAbstract:We examine the effectiveness of additional audit effort in lowering the risk of financial misstatements for companies with internal control material weaknesses during three separate post-SOX time periods. Our findings suggest that additional audit effort (as proxied by abnormal audit fees) is effective in lowering the risk of financial misstatements for clients with weak internal controls during the Auditing Standard No. 2 regime (2004–2006), but not during the extant Auditing Standard No. 5 (AS5) regime or the earlier 2002–2004 pre-404 audit (but still post-SOX) time period. We contribute to the on-going debate about the potential benefits associated with the SOX 404 audit and, in particular, the emerging literature on the effectiveness, or lack thereof, of the SOX 404 audit in improving the assessment of control risk under the extant AS5 regime (Schroeder and Shepardson in Account Rev 91(5):1513–1541, 2016 ). Collectively, our findings are consistent with the notion that extant PCAOB concerns about internal control quality under AS5 may be valid.
Lili Sun - One of the best experts on this subject based on the ideXlab platform.
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The SOX 404 control audit and the effectiveness of additional audit effort in lowering the risk of financial misstatements
Review of Quantitative Finance and Accounting, 2019Co-Authors: Chan Li, K K Raman, Lili Sun, Rong YangAbstract:We examine the effectiveness of additional audit effort in lowering the risk of financial misstatements for companies with internal control material weaknesses during three separate post-SOX time periods. Our findings suggest that additional audit effort (as proxied by abnormal audit fees) is effective in lowering the risk of financial misstatements for clients with weak internal controls during the Auditing Standard No. 2 regime (2004–2006), but not during the extant Auditing Standard No. 5 (AS5) regime or the earlier 2002–2004 pre-404 audit (but still post-SOX) time period. We contribute to the on-going debate about the potential benefits associated with the SOX 404 audit and, in particular, the emerging literature on the effectiveness, or lack thereof, of the SOX 404 audit in improving the assessment of control risk under the extant AS5 regime (Schroeder and Shepardson in Account Rev 91(5):1513–1541, 2016 ). Collectively, our findings are consistent with the notion that extant PCAOB concerns about internal control quality under AS5 may be valid.
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the effect of ambiguity in an Auditing Standard on auditor independence evidence from nonaudit fees and sox 404 opinions
Journal of Contemporary Accounting & Economics, 2017Co-Authors: K K Raman, Lili SunAbstract:Abstract We examine the relation between nonaudit fees and SOX 404 opinions on the effectiveness of a client’s internal control over financial reporting. We find a negative association between nonaudit fees and the auditor’s propensity to issue an adverse SOX 404 opinion during 2004–2006 (when AS2 was the applicable Standard), but not in 2007 or 2008 (when AS5 was the applicable Standard). Our results hold when we control for office size and time trend and examine tax and nontax nonaudit fees separately. These findings suggest that AS5 reduced ambiguity relative to AS2 and improved auditor independence. Our paper contributes to two literature streams: (1) the sparse literature on the adverse effects associated with ambiguity (lack of precision) in an Auditing Standard ( Willekens and Simunic, 2007 , Ye and Simunic, 2013 ), and (2) the AS5 literature by documenting that AS5 contributed to a more effective audit via greater auditor independence.
