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Much of the extant audit research focuses on the impact of excess audit fees paid to the auditors on earnings management. However, there is limited empirical evidence on whether auditors tolerate earnings management when audit fees are low, i.e., below the level of normal fees. Using a large...
Persistent link: https://www.econbiz.de/10013114765
This paper examines whether book-tax differences help explain audit fees. By attesting to the fair representation of financial information, auditors are an important intermediary in financial statement users' trust and understanding of financial information. Our evidence that large book-tax...
Persistent link: https://www.econbiz.de/10013150927
Auditors' low-balling in initial engagements is a longstanding concern for regulators and others. We examine the determinants and consequences of low-balling using more recent data. We provide evidence that auditors are likely to low-ball if they are “Big N” auditors, expect future revenues...
Persistent link: https://www.econbiz.de/10012902906
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Credit rating agencies and auditors are complementary certification agents subject to a conflict of interest inherent in their compensation structure. We examine client firm credit ratings to test alternative hypotheses of abnormal audit fees. We predict and find both cross-sectional and time...
Persistent link: https://www.econbiz.de/10012987727
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