Purpose – The paper aims to investigate audit and non-audit fees during the global financial crisis (GFC) in an environment that is relatively sparsely regulated with regard to the provision of non-audit services. Design/methodology/approach – Audit and non-audit fees were studied during pre-GFC (2006-2007), GFC (2008-2009) and post-GFC (2010-2011) periods. Findings – During the GFC, Swedish companies benefited from an increase in sales and total assets, although return on assets decreased. In this setting, the auditors charged higher audit fees compared with the pre-GFC period, despite the absence of increased audit reporting lags. A significant increase in audit fees continued during the post-crisis periods with auditors paying more attention to companies’ leverage and whether they report losses. At the same time, the companies spent less on non-audit services. Research limitations/implications – This study is limited to companies from Sweden, which was less affected by the GFC. Practical implications – GFC auditors are able to charge higher audit fees to public companies including those that are well-performing during financial crises, and they are also able to increase the audit fees in the post-crisis period. This implies that auditors put in extra audit effort to compensate for higher risk, or that they are good at negotiating prices with their clients. However, non-audit fees decreased during the same period, implying that the demand for these services drops under financial instability. Originality/value – The study highlights auditors’ behavior in the liberal economic environment and it studies both audit fees and non-audit fees before GFC, during GFC and after the GFC. The GFC appears to have provided audit firms the opportunity to extract higher audit fees. Our findings are of interest to managers, auditors and regulators.

The purpose of the study is to investigate the relationship between fair value measurement and audit fees. Using a sample of 177 banks from 24 European countries over the period 2008–13, we find that high uncertainty fair value assets are positively related to audit fees. The result is consistent with the suggestion that more complex estimates require greater audit effort. To provide more insight into the impact of fair value measurement on audit fees, we examine this relation under institutional settings with different strength of regulations. The results suggest that the strength of a country's institutional setting is positively related to effort spent on evaluation of higher uncertainty fair value inputs. The finding is consistent with the prediction that auditors expend more effort in more strongly regulated settings due to higher potential litigation costs. Finally, we find that the total proportion of fair‐valued assets does not affect audit fees. The result can be attributed to the composition of the total proportion of fair‐valued assets which is dominated by low uncertainty (Level 1) inputs.

Abstract:In 1995, the American Association for the Advancement of Science and the American Society for Engineering Education received a grant from the National Science Foundation to undertake a project aimed both at assisting Russian philosophers in developing curriculum on engineering ethics and learning how context affects the teaching of engineering ethics. The project began with three Russian philosophers visiting the U.S. to observe how we teach engineering ethics. The American members of the project then made three visits to Russia to be part of three different workshops that brought together Russian professors from a variety of disciplines to exchange ideas about teaching ethics among themselves and with the Americans. During these visits, three of the Russians asked if we thought American philosophers would be interested in hearing about the Russian situation. We were delighted by the question (especially since we had become fascinated with the differences in Russian ideas about ethics), and responded with enthusiasm for the idea of their writing such an article. The article that follows is the result of their endeavor to explain how business ethics issues arise in Russia. Among other things, the article reveals how Russia’s history and the experiences of Russians under the U.S.S.R create a context extremely different from our own, for thinking about (and teaching) business ethics.

This article provides evidence of the relations between disclosures in the management report of conditions that could challenge the continuance of operations, auditors' going concern reporting and the likelihood of bankruptcy for privately held firms in an environment characterized by low litigation risk. We conduct a matched case–control study using data for 125 firms filing for liquidation bankruptcy and 125 non‐bankrupt firms. The results show that disclosures in the management report and auditors' going concern modifications are positively associated with the likelihood of bankruptcy and that their predictive ability is incremental to the control factors. Despite the lower litigation pressure facing private Swedish firms, the informational value of going concern disclosures is comparable with those in litigious environments.

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