Non-audit services and audit quality --- the effect of Sarbanes-Oxley Act

Chu, Betty; Hsu, Yun-Sheng

doi:10.1016/j.apmrv.2017.07.004

Cited by 23 publications

(20 citation statements)

References 28 publications

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“…The Sarbanes-Oxley Act (SOX) was issued as a response to the government errors and ensuing issues that required quickly and qualitative solutions and therefore promotes new requirements for auditor independence while ensuring and improving the quality of audit and non-audit services (Chu & Hsu, 2018). The main idea of the SOX is to improve the performance of corporate executives, to discipline the activities of companies and to promote us of innovation in their activities.…”

Section: Literature Reviewmentioning

confidence: 99%

Preventional Audit: Implementation of Sox Control to Prevent Fraud

Назарова

Mysiuk

Gordopolov

et al. 2020

Business: Theory and Practice

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The Euro-integration vector of Ukraine economic development and business in the open economy zone expands the economic and social potential of domestic enterprises and requires the formation of a reliable information environment to ensure the corporate interests of their investors (in the first) and other users of information (in particular). Today, corporate fraud is the most widespread form of economic crime in Ukraine and the world, which affects about 48% of domestic enterprises. The study attracted substantiated attention to the negative tendency towards the growth of economic crime in Ukraine, which in the end focuses on the fact that domestic business should apply a set of measures to withdraw part of the business from the “shadow economy”. As a result, such measures will help increase the attractiveness of Ukraine’s business investment. The study systematized and analyzed the progressive experience of developed countries, in the first place, the United States, in the fight against economic fraud. The study provides all grounds for asserting that it is quite feasible to achieve the tangible reduction of economic (financial) fraud with preventive measures (which is rather quick and effective). It is proved that the lack of aspirations of the enterprise management to overcome fraud leads to the formation of new money laundering schemes, and not control mechanisms – prevention of opportunities for committing fraud.

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Section: Literature Reviewmentioning

confidence: 99%

Preventional Audit: Implementation of Sox Control to Prevent Fraud

Назарова

Mysiuk

Gordopolov

et al. 2020

Business: Theory and Practice

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“…The results of their study suggest that pre-SOX studies delivered more significant outcomes and results than post-SOX ones. Chu and Hsu (2018) investigate the pre-and post-SOX impact of NAS on the audit quality measured by accounting conservatism. The empirical results of their study indicate poorer audit quality pre-SOX and no conclusive results in the post-SOX group, suggesting an overall positive influence of the act itself.…”

Section: Nas and The Implications Of The Audit Regulationsmentioning

confidence: 99%

The Audit Reform and Non-Audit Services in the Light of the Big-4 Transparency Reports – the EU Perspective

Indyk¹

2020

AEF

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The aim of this article is to compare and contrast three different approaches towards non-audit services (henceforth “NAS”) based on: 1) researchers’ views, 2) the EU regulation, and 3) the provision of NAS by the Big-4 firms operating in twenty-seven EU member states. Therefore, the article includes: (i) a literature review of various NAS aspects, (ii) an analysis of the EU reform in terms of NAS, and (iii) an empirical analysis of NAS fees which have been disclosed in the Big-4 transparency reports for the period 2017-2019.The literature review shows: a) lack of consensus between researchers about the potential consequences of the NAS provision in general, b) quite limited or little evidence of the consequences of the NAS restrictions as part of the EU audit reform, c) ambiguity in terms of the NAS definition itself which results mainly from insufficient NAS disclosures and lack of a detailed NAS split.The EU regulators addressed these concerns only in very narrow aspects, i.e., through: (1) the NAS black list, (2) the NAS cap, and (3) the strong emphasis on public-interest entities (henceforth “PIEs”). What is more, NAS disclosure requirements in the transparency reports are limited only to two categories.Finally, the results of the empirical study indicate the significant differences at the NAS fee level among the EU member states. The analysis shows a particular importance of NAS fees from other clients as a substantial revenue stream for the Big-4 firms. The results suggest also a significant increase in this category in 2018 when NAS fees from other clients increased by net EUR809 million (13%). However, this strong trend was not confirmed in the following year.All in all, the study underlines deficiency in proper NAS disclosure and reporting which might be observed also in the case of transparency reports. All findings of this study may be another argument for regulators to address the problem of NAS in more detail starting from their advice on a NAS taxonomy which might be used then as a point of reference. It would be also beneficial for researchers exploring the NAS aspect and, thus, may enhance data and results comparability between studies. Additional disclosure requirements like NAS provided to PIEs or a recurring or non-recurring character of NAS would also support the better understanding and evaluation of the consequences of the EU audit reform.

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“…Hal ini pulalah yang diyakini oleh se jumlah peneliti bahwa diperlukan standar audit yang relevan de ngan keputusan opini audit secara keseluruh an mengatur tentang opini yang diberikan KAP, apabila terdapat peristiwa yang menimbulkan keraguan au ditor atas kelangsungan usaha perusahaan (Habib & Muhammadi, 2018;Ika & Ghaza li, 2012;Rusmin & Evans, 2017;Widuri, O'Connell, & Yapa, 2016). Regulasi seperti Sarbanes-Oxley Act (Asthana & Boone, 2012;Chen, Krishnan, & Yu, 2018;Chu & Hsu, 2018;Johnson, Reichelt, & Soileau, 2018;Ng, Tronnes, & Wong, 2018) perlu dibuat untuk meredam praktik opinion shopping di Indonesia. Dengan demikian, lama perikatan antara KAP dengan pihak auditee tidak ber pengaruh positif terhadap opinion shopping.…”

Section: Metodeunclassified

Implikasi Likuiditas Perusahaan Bagi Opinion Shopping

Verawaty

Jaya

Pratiwi

2018

jamal

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Implikasi Likuiditas Perusahaan bagi Opinion Shopping. Penelitian ini menguji pengaruh opinion shopping terhadap biaya audit abnormal, likuiditas, profitabilitas, dan lamanya perikatan audit. Pene litian ini menggunakan metode regresi logistik terhadap 40 perusahaan terbuka sektor manufaktur di Indonesia. Hasil analisis mununjukkan bahwa perusahaan mengalami kendala jika kurang likuid karena tidak dapat memenuhi kompensasi bagi stakeholder kreditur. Hal ini diyakini memperkuat probabilitas manajemen untuk melakukan opinion shopping demi mendapat opini wajar tanpa pengecualian. Oleh karena itu, akun tan profesional harus memegang teguh kode etik profesi untuk menjaga integritas dengan mengeluarkan opini sesuai kondisi yang sebenarnya.

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Non-audit services and audit quality --- the effect of Sarbanes-Oxley Act

Cited by 23 publications

References 28 publications

Preventional Audit: Implementation of Sox Control to Prevent Fraud

Preventional Audit: Implementation of Sox Control to Prevent Fraud

The Audit Reform and Non-Audit Services in the Light of the Big-4 Transparency Reports – the EU Perspective

Implikasi Likuiditas Perusahaan Bagi Opinion Shopping

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