Topic
External auditor
About: External auditor is a research topic. Over the lifetime, 3591 publications have been published within this topic receiving 76259 citations.
Papers published on a yearly basis
1 / 2
Papers
TL;DR: In this article, the authors examined the Big Eight audit firms and found that they tend to charge higher fees than non-Big Eight firms, which might reflect the higher quality of the audit services supplied by that firm.
Abstract: During the past decade, the structure of the market for public accounting services-particularly audit services-has received scrutiny from regulators, practitioners, and researchers. A major focus has been on supplier (audit firm) size, and especially on the large shares of markets held by a subset of firms called the Big Eight.' One hypothesis is that the Big Eight function as a cartel and charge higher than competitively warranted fees. This hypothesis was tested by Simunic [1980], who concluded that the Big Eight as a group tended to charge lower fees than non-Big Eight firms. His conjecture was that his results were consistent with scale economies enjoyed by the larger CPA firms. He did observe, however, that one of his Big Eight firms seemed to "charge higher fees," which might reflect the higher quality of the audit services supplied by that firm.2
1,174 citations
TL;DR: In this article, the authors investigate the extent to which corporate governance attributes, ownership structure and company characteristics influence the extent of voluntary disclosure in a developing country, namely Kenya, and find that the presence of an audit committee is a significant factor associated with the level of disclosure.
Abstract: There has been considerable research in respect of voluntary disclosure by companies and factors that may explain such disclosure. However, most of the research has been centred in developed countries. This study extends the previous literature by examining voluntary disclosure in a developing country, namely Kenya. Over the last decade, the Kenyan Government has initiated several far-reaching reforms at the Nairobi Stock Exchange (NSE) in order to mobilise domestic savings and attract foreign capital investment. These measures include privatisation of state corporations through the stock exchange and allowing foreign investors to own shares in the listed companies. This study provides a longitudinal examination of voluntary disclosure practices in the annual reports of listed companies in Kenya from 1992 to 2001. The study investigates the extent to which corporate governance attributes, ownership structure and company characteristics influence voluntary disclosure practices.
Our results suggest that the extent of voluntary disclosure is influenced by a firm's corporate governance attributes, ownership structure and company characteristics. The presence of an audit committee is a significant factor associated with the level of voluntary disclosure, and the proportion of non-executive directors on the board is found to be significantly negatively associated with the extent of voluntary disclosure. The study also finds that the levels of institutional and foreign ownership have a significantly positive impact on voluntary disclosure. Large companies and companies with high debt voluntarily disclose more information. In contrast, board leadership structure, liquidity, profitability and type of external audit firm do not have a significant influence on the level of voluntary disclosure by companies in Kenya.
1,077 citations
TL;DR: In this article, the authors examined the relationship between audit quality and long audit partner tenure and found a lower propensity to issue a going-concern opinion and some evidence of just beating (missing) earnings benchmarks.
Abstract: Rotation of audit partners is one of the main policy initiatives that has been implemented in many jurisdictions around the world to deal with concerns about audit quality. The basis of any requirement limiting the tenure of audit partners is that there is a reduction in audit quality associated with long periods of tenure. Using data from Australia, where the audit partner can be identified and for a period where partner rotation was not mandatory, we examine the association between audit quality and long audit partner tenure. The three measures of audit quality examined are the auditor's propensity to issue a going‐concern audit opinion for distressed companies, the direction and amount of abnormal working capital accruals, and just beating (missing) earnings benchmarks. For long tenure observations we find a lower propensity to issue a going‐concern opinion and some evidence of just beating (missing) earnings benchmarks, consistent with deterioration in audit quality associated with long audit partner ...
1,057 citations
TL;DR: In this article, the authors examined the relation between the composition of financially distressed firms' audit committees and the likelihood of receiving going-concern reports for firms experiencing financial distress during 1994 and found that the greater the percentage of affiliated directors on the audit committee, the lower the probability the auditor will issue a going concern report.
Abstract: This study examines the relation between the composition of financially distressed firms' audit committees and the likelihood of receiving going‐concern reports For firms experiencing financial distress during 1994, we find that the greater the percentage of affiliated directors on the audit committee, the lower the probability the auditor will issue a going‐concern report These results support regulators' concern about financial‐reporting quality and the recent calls for more independent audit committees
1,027 citations
TL;DR: In this article, the authors examined whether external independent auditors could be employed as monitors and as bonding mechanisms to alleviate the agency conflict in emerging markets and found that firms are more likely to employ Big Five auditors when they are more subject to the agency problem imbedded in their ultimate ownership structure.
Abstract: In emerging markets, the concentration of corporate ownership has created agency conflicts between controlling owners and minority shareholders. Conventional corporate control mechanisms such as boards of directors and takeovers are typically weak in containing the agency problem. This study examines whether external independent auditors could be employed as monitors and as bonding mechanisms to alleviate the agency conflict. Using a broad sample of firms from eight East Asian economies, we document that firms are more likely to employ Big Five auditors when they are more subject to the agency problem imbedded in their ultimate ownership structure. One possible reason that this documented relation between auditor choice and the agency problem is more evident than the inconsistent results using U.S. and U.K. data is that alternative governance mechanisms are limited in East Asia. In addition, among East Asian auditees subject to the agency problem, Big Five auditors charge a higher fee and set a lower audit modification threshold while non-Big Five auditors do not. Taken together, the evidence suggests that Big Five auditors in emerging markets do have a corporate governance role.
1,002 citations
Related Topics (5)
Performance Metrics
| Year | Papers |
|---|---|
| 2025 | 46 |
| 2024 | 46 |
| 2023 | 85 |
| 2022 | 108 |
| 2021 | 134 |
| 2020 | 163 |