Do Non-audit Service Fees Impair Auditor Independence? Evidence from Going-concern Audit Opinions

The Effect of Guanxi on Audit Quality in China

“…Consistent with Lennox (2000Lennox ( , 2005, Size has a significantly negative coefficient, which shows that larger firms have greater lobbying power in their dealings with audit firms and are less likely to receive unclean audit opinions. Similarly, the coefficients of CR, RAO, and Cash are all significantly negative, which is consistent with DeFond et al (2002), Lennox (2005), and Firth et al (2007), respectively. A higher current ratio, higher profitability, and greater operating cash flow mean lower business risk.…”

Post-Enron Implicit Audit Reporting Standards: Sifting through the Evidence

“…Following many studies of going-concern opinions, we also single out the financially distressed firms (Mutchler et al (1997); Reynolds and Francis (2001);DeFond et al (2002)) -firms that report either negative earnings or operating cash flows during the current fiscal year. This sample, about one-fourth of the total, has far more non-clean opinions (12.45%), but otherwise the results are qualitative similar to our main ones.…”

“…This provides about 30,000 records. As in prior audit reporting research (Reynolds and Francis (2001);DeFond et al (2002)) we exclude financial institutions, i.e. 5,000 1 This refers to the level of deviation between accounting numbers and standards that is acceptable to an auditor.…”

Ethical Dilemmas in Auditing: Dishonesty or Unintentional Bias?

“…Several studies have shown that the number of qualified audit reports for firms with bad financial health is scarce. For example, Ruiz-Barbadillo et al (2004) and DeFond et al (2002) concluded that only 4% of financially distressed companies receives a warning signal from auditors. In addition, the financial press is persistently asking ''why do auditors not warn investors?''…”