The Experts below are selected from a list of 9258 Experts worldwide ranked by ideXlab platform

Tim Bauer - One of the best experts on this subject based on the ideXlab platform.

  • the effects of client identity strength and professional identity salience on Auditor judgments
    Social Science Research Network, 2014
    Co-Authors: Tim Bauer
    Abstract:

    Considerable recent audit regulation, both proposed and mandated, and accounting research has focused on Auditor Independence threats arising over long Auditor tenure. Psychology research, however, suggests Independence threats also likely arise when Auditor tenure is short because Auditors can quickly develop a strong client identity, raising questions about the effectiveness of mandatory audit partner or firm rotation to address Independence concerns. Relying on Social Identity Theory, I examine mechanisms for promoting Auditor Independence that can be implemented regardless of Auditor tenure or rotation. I conduct two experiments in a setting with no prior Auditor-client history. As predicted, Auditors who identify more strongly with their clients, by sharing their values, agree more with the client’s preferred accounting treatment, unless the salience (i.e., arousal) of their professional identity is heightened. Further, as predicted, heightening professional identity salience increases professional skepticism. My results provide an improved understanding of the joint effects of identity strength and salience on Auditor judgments and suggest a cost-effective alternative to Auditor rotation to maintain Auditor Independence, even when Auditor tenure is short.

Tim D. Bauer - One of the best experts on this subject based on the ideXlab platform.

  • The Effects of Client Identity Strength and Professional Identity Salience on Auditor Judgments
    The Accounting Review, 2014
    Co-Authors: Tim D. Bauer
    Abstract:

    ABSTRACT: Considerable recent audit regulation, both proposed and mandated, and accounting research has focused on Auditor Independence threats arising over long Auditor tenure. Psychology research, however, suggests Independence threats also likely arise when Auditor tenure is short because Auditors can quickly develop a strong client identity, raising questions about the effectiveness of mandatory audit partner or firm rotation to address Independence concerns. Relying on Social Identity Theory, I examine mechanisms for promoting Auditor Independence that can be implemented regardless of Auditor tenure or rotation. I conduct two experiments in a setting with no prior Auditor-client history. As predicted, Auditors who identify more strongly with their clients, by sharing their values, agree more with the client's preferred accounting treatment, unless the salience or arousal of their professional identity is heightened. Further, as predicted, heightening professional identity salience increases professio...

Eugene G Chewning - One of the best experts on this subject based on the ideXlab platform.

  • the effect of internal audit outsourcing on financial analysts perceptions of external Auditor Independence
    Ear and Hearing, 2001
    Co-Authors: Susan L Swanger, Eugene G Chewning
    Abstract:

    The practice of outsourcing the internal audit function to the external audit firm has raised fears by many parties such as the SEC of possible Independence impairment. The fear stems from the increased economic bond that exists when additional services are provided to an audit client, as well as the long‐held view that internal auditing is a management function and, as such, is incompatible with the external audit function. This paper reports the results of a two‐phase study of the perceptions of financial analysts regarding external Auditor Independence when a CPA firm performs both external and internal auditing services. In phase 1, analysts' perceptions of Auditor Independence are greater when the client employs its own internal audit staff or outsources to a different CPA firm than when the external Auditor also performs internal audit functions. Phase 2 results show that analysts' perceptions of Auditor Independence are higher when the internal audit services are provided by the staff of a differen...

  • the effect of internal audit outsourcing on financial analysts perceptions of external Auditor Independence
    2001
    Co-Authors: Susan L Swanger, Eugene G Chewning
    Abstract:

    The practice of outsourcing the internal audit function to the external audit firm has raised fears by many parties such as the SEC of possible Independence impairment. The fear stems from the increased economic bond that exists when additional services are provided to an audit client, as well as the long-held view that internal auditing is a management function and, as such, is incompatible with the external audit function. This paper reports the results of a two-phase study of the perceptions of financial analysts regarding external Auditor Independence when a CPA firm performs both external and internal auditing services. In phase one, analysts' perceptions of Auditor Independence are greater when the client employs its own internal audit staff or outsources to a different CPA firm than when the external Auditor also performs internal audit functions. Phase two results show that analysts' perceptions of Auditor Independence are higher when the internal audit services are provided by the staff of a different division of the CPA firm compared to a no staff separation treatment. Perceptions do not differ between full and partial outsourcing treatments, which conflicts with the recent SEC rule limiting the extent of outsourcing arrangements.

Mark L Defond - One of the best experts on this subject based on the ideXlab platform.

  • do non audit service fees impair Auditor Independence evidence from going concern audit opinions
    Journal of Accounting Research, 2002
    Co-Authors: Mark L Defond, K Raghunandan, K R Subramanyam
    Abstract:

    We find no significant association between non–audit service fees and impaired Auditor Independence, where Auditor Independence is surrogated by Auditors’ propensity to issue going concern audit opinions. We also find no association between going concern opinions and either total fees or audit fees. In addition, our findings are robust to controlling for unexpected fees, to controlling for endogeneity among our variables, and to several alternative research design specifications. Our results are consistent with market–based incentives, such as loss of reputation and litigation costs, dominating the expected benefits from compromising Auditor Independence.

  • do non audit service fees impair Auditor Independence evidence from going concern audit opinions
    Social Science Research Network, 2002
    Co-Authors: Mark L Defond, K Raghunandan, K R Subramanyam
    Abstract:

    We find no evidence that non-audit service fees impair Auditor Independence, where Independence is surrogated by Auditors' propensity to issue going concern audit opinions. We do find, however, that Auditors are more likely to issue going concern opinions to clients paying higher audit fees, suggesting that Auditors behave with relatively greater Independence towards these clients. Our findings are consistent with Reynolds and Francis (2001) and suggest that market-based incentives, such as loss of reputation and litigation costs, dominate the benefits Auditors are likely to receive from compromising their Independence to retain clients that pay larger fees. Overall, our findings indicate that recent SEC regulations based on concerns that non-audit services impair Auditor Independence, are unfounded.

  • the impact of improved Auditor Independence on audit market concentration in china
    Journal of Accounting and Economics, 1999
    Co-Authors: Mark L Defond, T J Wong
    Abstract:

    In an attempt to increase credibility in its capital markets, China recently adopted new auditing standards. Consistent with increased Auditor Independence, we "nd that the frequency of modi"ed opinions increases nine-fold subsequent to the adoption of the new standards. However, the increase in modi"ed reports is followed by a decline in audit market share among large Auditors } those with the greatest propensity to issue modi"ed reports. We conjecture that this &#ight from audit quality’ results from lack of incentives to demand independent Auditors. Our "ndings suggest that government regulation alone is insu$cient to create "nancial markets that foster Auditor Independence. ( 2000 Elsevier Science B.V. All rights reserved. JEL classixcation: G38; L15; L84; M4; O16; O53; P23

  • the impact of improved Auditor Independence on audit market concentration in china
    Social Science Research Network, 1999
    Co-Authors: Mark L Defond, T J Wong
    Abstract:

    In an effort to increase the credibility of financial information in its emerging capital markets, China recently adopted rigorous new auditing standards designed to increase Auditor Independence. Consistent with increased Auditor Independence, we find that the frequency of modified opinions increases nine-fold subsequent to the adoption of the new standards. However, the increase in modified reports is immediately followed by a large decline in audit market share among the largest Auditors -- those with the greatest propensity to issue modified reports. We conjecture that this "flight from audit quality" results from the absence of market-based incentives for Chinese managers to demand independent Auditors. Our findings suggest that government regulation alone is not sufficient to create financial markets that foster Auditor Independence.

Susan L Swanger - One of the best experts on this subject based on the ideXlab platform.

  • the effect of internal audit outsourcing on financial analysts perceptions of external Auditor Independence
    Ear and Hearing, 2001
    Co-Authors: Susan L Swanger, Eugene G Chewning
    Abstract:

    The practice of outsourcing the internal audit function to the external audit firm has raised fears by many parties such as the SEC of possible Independence impairment. The fear stems from the increased economic bond that exists when additional services are provided to an audit client, as well as the long‐held view that internal auditing is a management function and, as such, is incompatible with the external audit function. This paper reports the results of a two‐phase study of the perceptions of financial analysts regarding external Auditor Independence when a CPA firm performs both external and internal auditing services. In phase 1, analysts' perceptions of Auditor Independence are greater when the client employs its own internal audit staff or outsources to a different CPA firm than when the external Auditor also performs internal audit functions. Phase 2 results show that analysts' perceptions of Auditor Independence are higher when the internal audit services are provided by the staff of a differen...

  • the effect of internal audit outsourcing on financial analysts perceptions of external Auditor Independence
    2001
    Co-Authors: Susan L Swanger, Eugene G Chewning
    Abstract:

    The practice of outsourcing the internal audit function to the external audit firm has raised fears by many parties such as the SEC of possible Independence impairment. The fear stems from the increased economic bond that exists when additional services are provided to an audit client, as well as the long-held view that internal auditing is a management function and, as such, is incompatible with the external audit function. This paper reports the results of a two-phase study of the perceptions of financial analysts regarding external Auditor Independence when a CPA firm performs both external and internal auditing services. In phase one, analysts' perceptions of Auditor Independence are greater when the client employs its own internal audit staff or outsources to a different CPA firm than when the external Auditor also performs internal audit functions. Phase two results show that analysts' perceptions of Auditor Independence are higher when the internal audit services are provided by the staff of a different division of the CPA firm compared to a no staff separation treatment. Perceptions do not differ between full and partial outsourcing treatments, which conflicts with the recent SEC rule limiting the extent of outsourcing arrangements.