An Empirical Assessment of the Impact of SEC Nonaudit Service Disclosure Requirements on Independent Auditors and Their Clients

Scheiner, James H.

doi:10.2307/2490682

Cited by 32 publications

(13 citation statements)

References 1 publication

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“…As already seen, contrasting findings do show that there is no detrimental effect on audit quality and audit independence (Antle et al, 1997;Glezen and Millar, 1985;Gul, 1989;Raghunandan, 2003;Scheiner, 1984), but nevertheless, many countries prefer the relevant professional bodies to acknowledge the potential conflict and formulate guidelines (Lee, 1993). Researchers who support the provision of joint services argue that this arrangement ameliorates audit independence (Antle et al, 1997), because it provides the auditor with better knowledge of a client (through 'knowledge spillover'), and may well enhance the likelihood of problem discovery, and hence audit quality (Goldman and Barlev, 1974;Wallman, 1996).…”

Section: Arguments In Favour Of the Provision Of Non-audit Servicesmentioning

confidence: 99%

Perceptions of Auditing and the Provision of Non-Audit Services: Case Study in Libya

Sawan¹,

Alzeban²,

Hamuda³

2013

IJBM

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This paper examines whether non audit service are associated with audit quality. In relation to the impact of non-audit service on audit quality, the provision of NAS to audit clients was found to provide auditors with greater experience of the client's industry and greater access to the client's accounting system. Additionally, such an arrangement was considered to enhance audit quality, but simultaneously it was also believed that a separation of NAS from audit services was desirable since auditors are perceived to have greater credibility when the demarcation is clear. A questionnaire was used to collect data. To confirm and support the questionnaire findings semi-structured interviews were conducted the data used for this study was collected from two sources: the demand side (Libyan oil companies) and the supply side (audit firms working in Libya).

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Section: Arguments In Favour Of the Provision Of Non-audit Servicesmentioning

confidence: 99%

Perceptions of Auditing and the Provision of Non-Audit Services: Case Study in Libya

Sawan¹,

Alzeban²,

Hamuda³

2013

IJBM

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“…250 required public disclosure of the type and quantity of non-audit services as a percentage of the total audit fee -however, this requirement was only in force between 1978 and 1981. 5 Using survey evidence, Scheiner (1984) found that the mandatory US disclosure requirement did not affect the demand for non-audit services -however, Scheiner did not investigate the issue of voluntary disclosure. 6 Hansard Parliamentary Debates, House of Lords, 16 January 1989, column 10.…”

Section: Notesmentioning

confidence: 99%

Non-audit fees, disclosure and audit quality

Lennox¹

1999

European Accounting Review

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This paper investigates the effect of non-audit services on audit quality. Following the announcement of the requirement to disclose non-audit fees, approximately one-third of UK quoted companies disclosed before the requirement became effective. Whilst distressed companies were more likely to disclose early, auditor size, directors' shareholdings and non-audit fees were not significantly correlated with early disclosure. These results cast doubt on the view that voluntary disclosure of non-audit fees was used to signal audit quality. The evidence also indicates a positive weakly significant relationship between disclosed non-audit fees and audit qualifications. This suggests that when non-audit fees are disclosed, the provision of non-audit services does not reduce audit quality.

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“…28-9). 34 At least one study claimed that the rules did not significantly reduce the quantity of services provided (Scheiner, 1984). This result is questionable, however, on at least two accounts.…”

Section: Analysis Of Mandatory Disclosurementioning

confidence: 99%

The provision of non-audit services by auditors let the market evolve and decide

Arruñada

1999

International Review of Law and Economics

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The provision of non-audit services by auditors to their audit clients reduces total costs, increases technical competence and motivates more intense competition. Furthermore, these services do not necessarily damage auditor independence nor the quality of non-audit services. This assessment leads to recommending that legislative policy should aim at facilitating the development and use of the safeguards provided by the free action of market forces. Regulation should thus aim to enable the parties-audit firms, self-regulatory bodies and audit clients-to discover through competitive market interaction both the most efficient mix of services and the corresponding quality safeguards, adjusting for the costs and benefits of each possibility. Particular emphasis is placed on the role played by fee income diversification and the enhancement, through disclosure rules, of market incentives to diversify. JEL codes: K22, K23, M40

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An Empirical Assessment of the Impact of SEC Nonaudit Service Disclosure Requirements on Independent Auditors and Their Clients

Cited by 32 publications

References 1 publication

Perceptions of Auditing and the Provision of Non-Audit Services: Case Study in Libya

Perceptions of Auditing and the Provision of Non-Audit Services: Case Study in Libya

Non-audit fees, disclosure and audit quality

The provision of non-audit services by auditors let the market evolve and decide

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