Reforming corporate governance post Enron: Shareholders' Board of Trustees and the auditor

From conformance to performance: The corporate responsibilities continuum

“…More recently, the demise of Arthur Andersen, and the close role it played in EnronÕs audit activities, highlighted the significance of auditor responsibilities. Considerable discussion has revolved around improving the selection, retention, and compensation of auditors (Abdel-khalik, 2002). A significant development in the US has been the creation of the Sarbanes-Oxley Act.…”

The impact of corporate governance on auditor choice: Evidence from China

“…In attesting to the credibility of accounting information provided by management, independent audits play an external monitoring role on behalf of the owners/shareholders and are an essential component of the corporate governance mosaic (Abdel-khalik, 2002;Ashbaugh & Warfield, 2003;Cohen, Krishnamoorthy, & Wright, 2002). Nonetheless the utility of audit services depends upon the quality of auditing.…”

Does Regulator Selection of Auditors Improve Audit Quality? Evidence from Auditor Designation in Korea

“…The practice of client managers hiring and firing auditors is believed to cause a fundamental conflict of interest that could impair auditor independence (Burton, 1980;Saul, 1996;Bazerman et al, 1997;Kinney Jr, 2000;Abdel-khalik, 2002;Bazerman et al, 2002;O'Connor, 2004;Shapiro, 2005;O'Connor, 2006;Ronen, 2010). Warren Buffett expresses this idea quoting a German proverb "Whose bread I eat, his song I sing" (Hilzenrath, 2001).…”

“…Warren Buffett expresses this idea quoting a German proverb "Whose bread I eat, his song I sing" (Hilzenrath, 2001). In the wake of Enron, several authors (Abdel-khalik, 2002;Palepu & Healy, 2003;O'Connor, 2004;Shapiro, 2005;O'Connor, 2006;Ronen, 2010) have advocated removing managers' control over hiring and firing of auditors, and giving it to regulators, stock exchanges, or independent shareholder trusts monitored by the stock exchange. In a related context there is regulatory action along these lines-for credit rating agencies, Section 939F (d) of the Dodd-Frank Act of 2010 requires the SEC to establish a system which removes the issuer's control over the selection of the credit rating agency.…”