Auditor Tenure and Audit Reporting Failures

Geiger, Marshall A.; Raghunandan, K.

doi:10.2308/aud.2002.21.1.67

Cited by 561 publications

(389 citation statements)

References 18 publications

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“…As Big 4 auditors are generally considered higher quality than non-Big 4 auditors (DeFond 1992;DeFond et al 2016;Palmrose 1988), clients of the Big 4 may be less likely to violate GAAP. As an additional auditor characteristic, we include auditor tenure, Auditor_Tenure, which could be associated with higher reporting quality due to auditor learning or lower reporting quality if auditor independence is compromised (Geiger and Raghunandan 2002;Johnson et al 2002;Myers et al 2003). We differentiate between auditor changes initiated by the client, Auditor_Dismissed, and those initiated by the auditor, Auditor_Resigned, to control for their potentially varying effects on our dependent variables.…”

Section: Methodsmentioning

confidence: 99%

Is the SEC captured? Evidence from comment-letter reviews

Heese

Khan

Ramanna

2017

Journal of Accounting and Economics

149

100

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SEC oversight of publicly listed firms ranges from comment letter (CL) reviews of firms' reporting compliance to pursuing enforcement actions against violators. Prior literature finds that firm political connections (PC) negatively predict enforcement actions, inferring SEC capture. We present new evidence that firm PC positively predict CL reviews and substantive characteristics of such reviews, including the number of issues evaluated and the seniority of SEC staff involved. These results, robust to identification concerns, are inconsistent with SEC capture and indicate a more nuanced relation between firm PC and SEC oversight than previously suggested.

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Section: Methodsmentioning

confidence: 99%

Is the SEC captured? Evidence from comment-letter reviews

Heese

Khan

Ramanna

2017

Journal of Accounting and Economics

149

100

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“…Geiger and Raghunandan (2002) IT investments and/or implementation. They need to put more efforts and bear higher risk so they charge higher audit fees.…”

Section: [Insert Table 3 About Here]mentioning

confidence: 99%

The Association between Information Technology Investments and Audit Risk

Han

Rezaee

Xue

et al. 2015

Journal of Information Systems

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SUMMARY:The advances in information technology (IT) have changed the way companies conduct business in using electronic commerce strategies, preparing financial reports and having their financial statements audited. Therefore, client firms' IT investments could have effects on audit risk. On one hand, the IT complexity creates challenges for auditors in auditing the effectiveness of internal control and detecting accounting irregularities. On the other hand, IT decreases audit risk by improving operation and internal control effectiveness which may decrease inherent and internal control risk. Yet, the relationship between clients' IT asset portfolios and audit risk remains an empirical question. Using proprietary IT data of US firms from 2000 to 2009, we find that IT investments are positively related to audit fees and abnormal audit fees, and negatively related to the probability of issuance of a going-concern audit opinion.Furthermore, we find that audit tenure moderates the above relationship due to the learning effect.

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“…It will take value 1 if it has had losses, or value 0 if it has not. Empirical research works that have analysed the circumstances that lead the auditor to issue a going concern audit opinion, highlight the company's financial position as the main explanatory factor (Geiger & Raghunandan, 2002).…”

Section: Independent Variablesmentioning

confidence: 99%

An analysis of determinants of going concern audit opinion: Evidence from Spain stock exchange

Larraz

Solé

2016

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Purpose: The main objective of this article is to go in-depth into the relationship between going concern audit opinion and certain characteristics of the company and auditor, including financial decline.Design/methodology/approach: A Logit analysis was carried out in order to enable us to discover the probability of receiving a going concern audit opinion. Findings:Characteristics of the company and characteristics of the auditor are discussed, and the analysis indicates that it is not financial decline, but rather registering losses and being audited by a small-scale auditor, that increase the likelihood of a company receiving a going concern audit opinion. Practical implications:The results obtained are interesting for the profession and users because they provide evidence of the reasons that converge in the cases where a going concern audit opinion is included in the auditing reports of companies characterised by being immersed in a financial crisis. Originality/value:This article considers the circumstances of both the company and the auditing process, which influence the fact that the auditing report includes a going concern audit opinion. In addition, the article includes the financial decline, and let us to analyze if the decline of the company's financial position between t-1 and t causes the auditor to include a going concern audit opinion.

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Auditor Tenure and Audit Reporting Failures

Cited by 561 publications

References 18 publications

Is the SEC captured? Evidence from comment-letter reviews

Is the SEC captured? Evidence from comment-letter reviews

The Association between Information Technology Investments and Audit Risk

An analysis of determinants of going concern audit opinion: Evidence from Spain stock exchange

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