An empirical study of the effects of audit committees, disclosure of nonaudit fees, and other issues on audit independence: Malaysian evidence

Teoh, Hai Yap; Lim, Chui Choo.

doi:10.1016/s1061-9518(96)90007-5

Cited by 77 publications

(75 citation statements)

References 10 publications

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“…High fee paid to auditors is viewed as impairing the auditor's independence in discharging their responsibilities. Result is consistent with earlier findings by [4] and [23] and [24] whom also found negative perceptions on high fees.…”

Section: Ols Regression Resultssupporting

confidence: 93%

“…Survey approach requires researchers to conduct surveys on auditors and financial statement users regarding their perception on an auditor's independence [4], [5], [23], [24]. However, there has been evidence on the existence of expectation gaps between the subjects.…”

Section: B Auditor Independencementioning

confidence: 99%

“…Meanwhile, [23] and [4] had found that the size of audit fees is the most significant perceived factor affecting impairment of auditor independence among loan officers and is supported by [24] using public and non-public accountants as respondents. Meanwhile, eventhough general beliefs view that non-audit services impair auditor's independence, past studies have shown weak evidence to conclude the beliefs.…”

Section: B Research Model and Measurementsmentioning

confidence: 99%

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Audit Services Fee, Non-Audit Services and the Reliability of Earnings

Malek¹,

Saidin²

2013

IJTEF

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Abstract-External auditing is essential due to the belief that it can enhance users' reliability of the financial reports. However, negative perception on auditor's independence decreases investors' reliability on the reports. The purpose of this study is to examine the effects of audit and non-audit fees on earnings response coefficient. Negative perception on auditor's independence concerning the high amount of fees decreases the investors' reliability on audited earnings and thus, results in lower ERCs. Based on 270 listed companies on the Bursa Malaysia in 2011, the OLS regression result shows that investors place lower reliability on earnings audited by highly paid auditors. Investors view high fees as a form of compensation to the auditors. The finding is consistent with earlier perceived studies which had found negative perceptions on high fees.Index Terms-Audit fees, non-audit fees, earnings response coefficient, auditor independence.

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Section: Ols Regression Resultssupporting

confidence: 93%

Section: B Auditor Independencementioning

confidence: 99%

Section: B Research Model and Measurementsmentioning

confidence: 99%

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Audit Services Fee, Non-Audit Services and the Reliability of Earnings

Malek¹,

Saidin²

2013

IJTEF

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“…(1) The effects of gifts (pany and Reckers, 1980); (2) The purchase discount arrangement (pany and Reckers, 1980); (3) The audit firm size (Shockley, 1981;Gul, 1989); (4) The provision of management advisory services (MAS) by the audit firm (Shockley, 1981;Knapp, 1985;Gul, 1989;Bartlett, 1993;Teoh and Lim, 1996;Abu Bakar et al 2005);…”

Section: Factors Affecting To Independencementioning

confidence: 99%

“…(5) The client's financial condition (Knapp, 1985;Gul, 1989;Gul and Tsui, 1992); (6) The nature of conflict issue (Knapp, 1985); (7) The audit firm's tenure (Shockley, 1981;Teoh and Lim, 1996); (8) The degree of competition in the audit services market (Knapp, 1985;Gul, 1989); (9) The size of the audit fees or relative client size (Gul and Tsui, 1992;Bartlett, 1993;Teoh and Lim, 1996;Pany and Reckers, 1980); (10) The audit committee (Gul, 1989;Teoh and Lim, 1996); and (11) Practicing non-audit services (NAS) by auditors (Beattie et al, 1999 and Rayhunadan;.…”

Section: Factors Affecting To Independencementioning

confidence: 99%

In the Name of Independence: with Regard to Practicing Non-Audit Service by External Auditors

Salehi

2009

IBR

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External auditors are very important for third partite because they add credibility to financial statements and third party can make decision in accord of financial statement audited. In recent years, the auditing and accounting profession faced scrutiny because of auditing scandals. Recent high profile accounting controversies such as Enron and World have highlighted the continuing debate about whether and how auditors can be independent of their clients (Kosmala, 2003). In the view of the fact, now a days because of non-audit services, the audit practice is questionable, whereas third parties believe that without independence, there is no value for accounting and auditing practices. In this paper the author concluded that the non-audit services impair audit independence and audit objectivity.In this situation, the author believes that both the professional and academic should be redefined non-audit services and also limited such services for audit and accounting professions; therefore national and international professions should be taken more reactions regarding to clarify of non-audit services to auditors as well as third parties.

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The Audit Committee: Performing Corporate Governance

Spira¹

2002

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An empirical study of the effects of audit committees, disclosure of nonaudit fees, and other issues on audit independence: Malaysian evidence

Cited by 77 publications

References 10 publications

Audit Services Fee, Non-Audit Services and the Reliability of Earnings

Audit Services Fee, Non-Audit Services and the Reliability of Earnings

In the Name of Independence: with Regard to Practicing Non-Audit Service by External Auditors

The Audit Committee: Performing Corporate Governance

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