2018
DOI: 10.21315/aamjaf2018.14.1.2
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Does the Provision of Non-Audit Services Affect Auditor Independence and Audit Quality? Evidence from Bahrain

Abstract: The main aim of this research is to investigate perceptions of respondents (auditors, accountants and financial managers) on the effect of provision of non-audit services (NAS) to audit clients companies upon auditor independence and audit quality. This study expands on previous work done on the effects of providing non-audit services upon auditors' independence and audit quality in Bahrain, which considered as an important subject for both auditing firms and auditing profession. This paper provides insights o… Show more

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Cited by 20 publications
(18 citation statements)
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References 50 publications
(74 reference statements)
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“…Auditing seeks to ensure the integrity and credibility of financial statements (Chu and Hsu, 2018;Khasharmeh and Desoky, 2018). Therefore, high audit quality leads to more reliable financial reporting.…”
Section: Literature Review and Development Of Hypothesesmentioning
confidence: 99%
“…Auditing seeks to ensure the integrity and credibility of financial statements (Chu and Hsu, 2018;Khasharmeh and Desoky, 2018). Therefore, high audit quality leads to more reliable financial reporting.…”
Section: Literature Review and Development Of Hypothesesmentioning
confidence: 99%
“…Thus, although Khasharmeh and Desoky (2018) and Bell et al (2015) state that the provision of non-audit services to audit clients is associated with an improvement in the audit quality, in recent years the legislative changes have been made in respect of restricting in different ways or even prohibiting the provision of non-audit services to audit clients (SOX, 2002, EU Regulation No. 537/2014).…”
Section: Resultsmentioning
confidence: 99%
“…Khasharmeh and Desoky, 2018); the audit firm category, respectively Big 4 or non-Big 4(Abid et al, 2018); the manner of auditors" rotation and switch to another category of audit firm(Febrianto et al, 2017); the manner of auditors" rotation (voluntary or mandatory), the membership of the audit firm to Big 4 and the auditor tenure(Choi et al, 2017). Other factors were also identified, such as: time to complete the engagement, the auditors" gender, position within the firm and experience, number of clients, size of the local office and audit firm(Broberg et al, 2017); the category of firms in the case of joint audit(Lobo et al, 2017); the audit team members" response to stress (Yan and Xie, 2016); the level of knowledge of the auditing standards and the degree of auditors' loading(Brown et al, 2016); the quality control of the audit supervision(Löhlein, 2016); the disciplinary sanctions imposed by the professional organizations (De Fuentes et al, 2015); the auditor tenure (Gonzalez-Diaz et al, 2015); the change of the organization form of the audit firm(Wang and Dou, 2015); the client firm's governance(Beisland et al, 2015); the membership in an association of small audit firms(Bills and Cunningham, 2015); the auditor tenure and fees for non-audit services(Bell et al, 2015) and the previous audit failure (Francis and Michas, 2013).…”
mentioning
confidence: 99%
“…The questionnaire is adopted from Khasharmeh and Desoky (2018). It comprises of three sections, in which Section 1 (i.e., questions 1 to 11) measures whether the provision of NAS impairs the auditor independence, Section 2 (i.e., questions 12 to 22) measures whether the provision of NAS improves audit quality, while Section 3 (i.e., questions 23 to 26) measures whether the provision of NAS does not affect auditor independence.…”
Section: Methodology Of Researchmentioning
confidence: 99%
“…During the last 20 years, various NAS rendered by auditing firms have emerged and have been widely adopted by companies around the world. This was due to the expansion and complication of the globalization, spreading of multinational companies, and the improvements in information technology (Khasharmeh & Desoky, 2018). The U.S. regulators have stated nine types of NAS services, which include bookkeeping, design, and implementation of financial information systems and valuation services or fairness opinions, internal auditing services, planning of human resources, actuarial services, and legal services (Sarbanes & Oxley, 2002).…”
Section: Introduction and Literature Reviewmentioning
confidence: 99%