Academic literature on the topic 'Ex-Auditors'
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Journal articles on the topic "Ex-Auditors"
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Fauzi, Ahmad, and Ach Faqih Supandi. "Perkembangan Audit Syariah Di Indonesia." Jurnal Istiqro 5, no. 1 (January 30, 2019): 24. http://dx.doi.org/10.30739/istiqro.v5i1.339.
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Shari'ah audits, especially in Indonesia, have opportunities in Indonesia with the world's largest Muslim majority population. And the shari'ah audit challenges for future development are better, including (1) regulatory issues such as shari'ah audit standards that are inadequate, the absence of a sharia audit framework and lack of encouragement from the government. (2) Problems of human resources such as the qualifications of shari'ah auditors in accounting and syari'ah are not balanced, the limited number of shari'ah auditors, lack of accountability of shari'ah auditors (DPS) and shari'ah auditors (DPS) are less independent. (3) Audit process problems such as DPS are not yet equipped with sharia audit procedures, Ex-ante and audit ex-poses have not been maximized and the separation of financial audits with sharia audits.
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Krishnan, Jagan, K. Raghunandan, and Joon S. Yang. "Were Former Andersen Clients Treated More Leniently Than Other Clients? Evidence from Going-Concern Modified Audit Opinions." Accounting Horizons 21, no. 4 (December 1, 2007): 423–35. http://dx.doi.org/10.2308/acch.2007.21.4.423.
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In the wake of the collapse of Enron and Andersen, several questions were raised about Enron's accounting and the behavior of its auditor. An important question is whether ex-Andersen's clients received more conservative treatment by their new auditors, either due to a greater perceived litigation risk because of their previous association with Andersen or because of a “correction” of alleged lax auditing by Andersen. We examine going-concern modified audit opinions for former clients of Arthur Andersen, and compare them with opinions issued for other newly acquired clients. We find that auditors were less likely to issue going-concern modified audit opinions to small clients who switched from Andersen than to their existing clients. However, this trend reverses with an increase in client size, with large former Andersen clients more likely to receive going-concern opinions. Our results are consistent with suggestions that increased litigation risk associated with the larger ex-Andersen clients led to increased conservatism by the new auditors. We conjecture that the reduced conservatism for the smaller ex-Andersen clients is likely due to high ex ante conservatism of the Big 4 in not accepting clients perceived to be risky.
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Cahan, Steven F., and Wei Zhang. "After Enron: Auditor Conservatism and Ex-Andersen Clients." Accounting Review 81, no. 1 (January 1, 2006): 49–82. http://dx.doi.org/10.2308/accr.2006.81.1.49.
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This study examines whether after Arthur Andersen's demise, successor auditors required more conservative accounting for their ex-Andersen clients in order to minimize litigation risk. We use unadjusted and performance-adjusted measures of abnormal accruals, and we examine the level of and changes in the abnormal accruals of ex-Andersen clients in 2002 relative to a control sample of clients that were audited by a Big 4 auditor in 2001 and 2002. We conduct univariate and multivariate tests. In our multivariate tests, we control for other factors that may affect litigation risk crosssectionally. Our results indicate that the ex-Andersen clients had lower levels of and larger decreases in abnormal accruals in 2002. This is consistent with auditor conservatism and suggests the successor auditors viewed an Andersen audit as a unique source of litigation risk.
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Khurana, Inder K., and K. K. Raman. "Litigation Risk and the Financial Reporting Credibility of Big 4 versus Non-Big 4 Audits: Evidence from Anglo-American Countries." Accounting Review 79, no. 2 (April 1, 2004): 473–95. http://dx.doi.org/10.2308/accr.2004.79.2.473.
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Prior research suggests that Big 4 auditors provide higher quality audits in the U.S. in order to protect the firm's brand name reputation and to avoid costly litigation. In this study, we examine whether the perceived higher quality of a Big 4 audit is related to auditor litigation exposure or to reputation concerns. Specifically, we utilize an estimable proxy for financial reporting credibility—the ex ante cost of equity capital—to examine whether Big 4 auditors are perceived as providing higher quality audits (relative to non-Big 4 auditors) in the U.S., and in the less litigious (but economically similar) environments in other Anglo-American countries during the 1990–99 period. We find that a Big 4 audit is associated with a lower ex ante cost of equity capital for auditees in the U.S. but not in Australia, Canada, or the U.K. Our findings suggest that it is litigation exposure rather than brand name reputation protection that drives perceived audit quality.
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Kadous, Kathryn. "The Effects of Audit Quality and Consequence Severity on Juror Evaluations of Auditor Responsibility for Plaintiff Losses." Accounting Review 75, no. 3 (July 1, 2000): 327–41. http://dx.doi.org/10.2308/accr.2000.75.3.327.
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This study investigates whether providing higher quality audits increases auditors' chances of avoiding legal liability. Negligence rules hold auditors responsible for plaintiff losses only when the quality of the audit provided fails to meet standards of care. The results of my experiment suggest that the ex post observed consequences of audit failure can affect the standards of care to which jurors hold auditors. Specifically, participants serving in the role of jurors assessed higher standards of care for auditors when the consequences of audit failure were more severe. Furthermore, when the consequences of audit failure were more severe, participants' evaluations of the auditor did not depend on the quality of the audit provided—auditors who provided higher quality audits were evaluated just as negatively as those who provided lower quality audits. In contrast, when audit failure led to only moderately negative consequences, auditors who provided higher quality audits received more favorable evaluations. These results suggest that providing higher quality audits will not necessarily protect auditors from legal liability when the consequences of audit failure are severe.
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Piercey, M. David. "Documentation Requirements and Quantified versus Qualitative Audit Risk Assessments." AUDITING: A Journal of Practice & Theory 30, no. 4 (November 1, 2011): 223–48. http://dx.doi.org/10.2308/ajpt-10171.
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SUMMARY The “not documented, not done” requirements of Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 3 substantially increased auditors' obligations to document their risk assessments. This study examines a potentially unintended consequence of such a requirement on auditors who have pressure to reach lenient, client-preferred risk assessments. Because documentation requirements potentially expose auditors' lenient judgments to more ex post scrutiny (e.g., regulator inspection, litigation), one would ordinarily not expect that adding them would cause auditors with client pressures to become more lenient. However, I expect that adding documentation requirements leads auditors who assess risk in qualitative (rather than quantified) terms to engage more in a specific word-smithing strategy that is shown by prior research to help rationalize reaching more lenient audit conclusions. Thus, even though documentation potentially exposes more lenient judgments to scrutiny, I show that auditors assessing risk in qualitative terms respond to this pressure by rationalizing their lenient assessments even more vigilantly. This leads to more lenient judgments, ironically, as a result of adding the documentation requirement. Adding documentation requirements does not have this effect on quantified risk assessments. Prior research also suggests that auditors typically assess risk in words. Thus, under common conditions, the PCAOB's documentation requirements may have unintended effects, with adverse implications for audit effectiveness contrary to their regulatory intent. Data Availability: Contact the author.
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Glover, Steven M., Douglas F. Prawitt, and T. Jeffrey Wilks. "Why Do Auditors Over-Rely on Weak Analytical Procedures? The Role of Outcome and Precision." AUDITING: A Journal of Practice & Theory 24, s-1 (December 1, 2005): 197–220. http://dx.doi.org/10.2308/aud.2005.24.s-1.197.
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Recent evidence from highly publicized frauds and from the Public Oversight Board's Panel on Audit Effectiveness (2000) indicates that auditors sometimes over-rely on evidence provided by weak substantive analytical procedures. In Experiment 1 we examine whether auditors' assessments of evidence quality are affected by a “favorable outcome” bias, manifested when an analytical procedure indicates that the balance under examination is fairly stated. In Experiment 2 we examine whether an explicit ex ante prompt can activate knowledge that will sensitize auditors to the weaknesses of an unreliable substantive analytical procedure. The first experiment provides evidence that auditors attribute more strength to a weak, aggregate-level analytical procedure that produces an expectation that is not significantly different from the unaudited numbers (i.e., a “favorable” outcome), than to the same analytical procedure that produces an expectation that is significantly different from the unaudited numbers. Further, auditors in the “favorable outcome” condition adjust their initial assessments down to a level very similar to that of auditors in the “unfavorable outcome” condition after seeing a more precise analytical procedure, while auditors in the unfavorable outcome condition do not change from their initial assessment after seeing the more precise procedure. Taken together, our results suggest that when a low-quality analytical procedure yields no significant difference, auditors tend to overestimate the strength of the evidence provided. Results from the second experiment indicate that the explicit consideration of potential weaknesses associated with the highly aggregated analytical procedure reduces auditors' assessments of the strength of evidence obtained from the aggregate procedure. Subjects' explanations suggest that the prompt activated their knowledge of the factors contributing to the quality of the analytical procedure.
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Kaplan, Steven E., and David D. Williams. "Do Going Concern Audit Reports Protect Auditors from Litigation? A Simultaneous Equations Approach." Accounting Review 88, no. 1 (August 1, 2012): 199–232. http://dx.doi.org/10.2308/accr-50279.
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ABSTRACT: Audit researchers have a long-standing interest in understanding whether issuing a going concern report to financially stressed clients protects auditors from litigation. An endogeneity issue arises, in that litigation risk affects the going concern decision and the going concern decision impacts auditor litigation risk. Using a simultaneous equations approach, we find a significant positive association between auditors' ex ante litigation risk and going concern reporting. By applying simultaneous equations, we also find a significant negative association between going concern reporting and auditor litigation, suggesting that auditors deter lawsuits by issuing going concern reports to their financially stressed clients. Our research further provides a more rigorous analysis of the relation between going concern reporting and lawsuit outcomes in the form of auditor litigation dismissals, small settlement amounts, and large settlement amounts. Our results indicate that when auditors are named in lawsuits, having issued a going concern report reduces the likelihood of large financial settlements. Data Availability: The data used in this study are publicly available through sources identified in the study.
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Nagy, Albert L. "Mandatory Audit Firm Turnover, Financial Reporting Quality, and Client Bargaining Power: The Case of Arthur Andersen." Accounting Horizons 19, no. 2 (June 1, 2005): 51–68. http://dx.doi.org/10.2308/acch.2005.19.2.51.
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This paper examines the effect of mandatory auditor change on audit quality in the unique environment created by the failure of Arthur Andersen (AA). The failure of AA forced a significant number of companies (ex-AA clients) to change auditors and also helped increase the overall skepticism exhibited on external audits. The demise of AA does not truly replicate a mandatory rotation regime, but it does provide a rich setting to examine one aspect of such a regime—the effect that a forced auditor change has on the level of audit quality. Furthermore, because ex-AA clients were forced to change auditors on a one-time basis and will not necessarily have to change auditors in the future, client bargaining power is likely to influence auditor behavior and is considered in this study's empirical analyses. This study provides evidence that, for smaller companies, the level of audit quality improved for companies forced to switch from AA, and that the negative relation between short auditor tenure and audit quality was effectively mitigated over the period of AA's demise. The lack of results for larger companies could reflect higher bargaining power toward their auditor. Further research is needed to determine if a forced auditor change would improve audit quality for larger companies in a true mandatory auditor rotation regime, where the amount of bargaining power possessed by companies would seemingly diminish.
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Elliott, John A., Aloke Ghosh, and Elisabeth Peltier. "Pricing of Risky Initial Audit Engagements." AUDITING: A Journal of Practice & Theory 32, no. 4 (May 1, 2013): 25–43. http://dx.doi.org/10.2308/ajpt-50523.
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SUMMARY We reexamine the association between audit fees and risky initial engagements by developing an ex ante client-risk metric that is based on auditor change 8-K filings. We concentrate on auditor-client disagreements and other reportable events (restatement, management integrity, scope limitations, illegal acts, reaudits) disclosed in the 8-K auditor change filings. We find that audit fees are significantly higher for clients reporting disagreements and other reportable events in their 8-K auditor change filings for the initial year of engagement. However, the fee premium is only attributable to Big 4 auditors. While the Big 4 charge 45 percent higher fees when clients have disagreements or other reportable events, there is no such fee premium associated with non-Big 4 clients. More importantly, Big 4 predecessor auditors increase fees prior to the auditor switch as clients develop problems. Big 4 successor auditors continue to charge significantly higher fees for at least three years following adverse 8-K disclosures. Our results provide evidence on how successor and predecessor auditors incorporate risk in the pricing of audit fees, where risk is based on the information contained in auditor change 8-K reports.
Dissertations / Theses on the topic "Ex-Auditors"
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Nortier, Edwige. "Becoming an ex-auditor : (un) doing professional norms." Electronic Thesis or Diss., Université Paris sciences et lettres, 2025. http://www.theses.fr/2025UPSLD001.
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Ce travail s’intéresse aux normes qui façonnent l’identité professionnelle des auditeurs au moment de leur départ des Big Four firms. Cette identité repose principalement sur leur capacité à intégrer les règles et normes tacites du professionnalisme (Stack & Malsch, 2022). Je m’appuie sur la réalisation d’une quarantaine d’entretiens semi-directifs réalisés auprès d’ex-auditeurs et d’auditeurs, ainsi que sur une perspective développée à partir des travaux de Judith Butler, qui considère les sujets comme perpétuellements faits et défaits, normativement légitimés et contraints (Tyler, 2019). En développant la relation qu’ont les auditeurs aux normes à travers trois périodes du départ (leur décision de partir, la période liminale et l’après), je souligne les tensions et contradictions des individus qui doivent passer d’être auditeur à devenir ex-auditeur. Théoriquement, cette thèse contribue à montrer que faire et défaire simultanément les normes permet de se maintenir reconnaissable comme professionnel à la fois dans le processus de départ et dans ce qui vient après. Ce maintien se fait à la fois par le relationnel à l’autre, mais aussi par rapport à l’audit, et s’explique à la fois par des raisons stratégiques et émotionnelles. Cette thèse ouvre donc la perspective de comprendre la circulation des normes par l’identité professionnelleThis research focuses on the norms that shape the professional identity of auditors as they depart from Big Four firms. This identity relies mainly on their ability to incorporate the unwritten rules and norms of professionalism (Stack & Malsch, 2022). I use around forty semi-structured interviews conducted with ex-auditors and current auditors as well as a perspective developed from Judith Butler’s work, which considers subjects as perpetually done and undone, normatively enabled and constrained (Tyler, 2019). By examining auditors’ relationships with these norms through different periods of their departure (their decision to leave, the liminal period, and the aftermath), I highlight the tensions and contradictions experienced by individuals as they transition from being auditors to becoming ex-auditors. Theoretically, this thesis shows that simultaneously doing and undoing norms enables individuals to remain recognisable as professionals both during the departure process and in what follows. This continuity is maintained through relationships with others, as well as through one’s relationship to auditing itself, and is explained by both strategic and emotional reasons. Consequently, this thesis opens up a perspective for understanding the circulation of norms through professional identity
Book chapters on the topic "Ex-Auditors"
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Riva, Patrizia, Maurizio Comoli, and Ambra Garelli. "Corporate Governance and ERM for SMEs Viability in Italy." In Risk Management [Working Title]. IntechOpen, 2021. http://dx.doi.org/10.5772/intechopen.96688.
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Family Small and Medium-sized Enterprises (Family SMEs) in Italy have been asked by the new Insolvency and Crisis Code (IC-Code) to establish organizational, management and accounting bodies and tools appropriate to their nature and size. They need to be able to face early warning of company’s crisis and potential loss of going concern and to be able to implement strategies provided by the law to recover viability. The peculiarity of the Italian System is the joint existence of two levels of controls. A “downstream” one carried out by Auditors in charge of the accounting control and an “upstream” one carried out by the Supervisory Board in charge for the surveillance of directors’ behaviour. The board of statutory auditors (Collegio Sindacale), which has been defined as the watchdog distinguishing Italian corporate governance system, plays a fundamental role in reaching the goal. Its supervisory activities are played ex-ante over directors and are set with independence and competence. Auditors, instead, operate when everything has already been decided or even implemented concentrating on the accounting issues. The IC-Code sets up new corporate governance rules for a huge number of Family SMEs requiring the appointment of independent control bodies, Board of Statutory Auditors and Auditors and demanding therefore for more attention to risk monitoring and managing.
Conference papers on the topic "Ex-Auditors"
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Sučić, Boris, Ružica Jurjević, Marko Bišćan, and Gašper Stegnar. "Refining energy efficiency and flexibility strategies using the smart readiness indicator. A comparative case study in Slovenia and Croatia." In 54th International HVAC&R Congress and Exhibition. SMEITS, 2024. http://dx.doi.org/10.24094/kghk.023.039.
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Energy and resource efficiency in combination with renewable energy sources constitute the backbone of fu-ture sustainable development in any sector. In this context, the reduction of energy consumption in buildings com-bined with the wide integration of renewable energy sources (RES) in urban areas are vital elements for the long-term transition towards a carbon-neutral society. The EU has identified buildings as the most promising target for improv-ing energy efficiency and has quantified a significant energy-saving potential associated with infrastructure and equipment investments. The calculation of the Smart Readiness Indicator (SRI) involves data collection from various aspects of a building's design, operation, and usage. During the data collection process, the SRI auditor had to ex-tract useful data from drawings, daily log sheets, predefined readings from various Supervisory Control and Data Acquisition systems (SCADA), and from the interview with the energy and/or facility managers, building occupants, and owners. Proper interpretation of SRI scores is crucial for the identification of the energy efficiency and flexibility potentials. This paper presents a comparative case study on the application of SRI in Slovenia and Croatia, focusing on the extraction of energy efficiency and flexibility measures. Additionally, this paper provides general elements of the code of conduct for the smart readiness rating. These elements of the code of conduct for smart readiness rating should be considered as a quality indicator for clients (building owners, facility managers, building users, etc.) on what they should expect and require from SRI auditors in order to achieve expected benefits. Additionally, the strengths and weaknesses of SRI auditing and its role in the decision-making process, specifically in the selection of the optimal energy-renovation scenario, were critically reviewed.