We evaluate and summarize the large body of audit fee research and use meta-analysis to test the combined effect of the most commonly used independent variables. The perspective provided by the meta-analysis allows us to reconsider the anomalies, mixed results, and gaps in audit fee research. We find that, although many independent variables have consistent results, several show no clear pattern to the results and others only show significant results in certain periods or particular countries. These variables include a loss by the client and leverage, which have become significant in comparatively recent studies; internal auditing and governance, both of which have mixed results; auditor specialization, regarding which there is still some uncertainty; and the audit opinion, which was a significant variable before 1990 but not in more recent studies.

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Audit Fees: A Meta-analysis of the Effect of Supply and Demand Attributes*

This study examines the association between measures of earnings quality and auditor industry specialization. Prior work has examined the association between auditor brand name and earnings quality, using auditor brand name to proxy for audit quality. Recent work has hypothesized that auditor industry specialization also contributes to audit quality. Extending this literature, we compare the absolute level of discretionary accruals (DAC) and earnings response coefficients (ERC) of firms audited by industry specialists with those of firms not audited by industry specialists. We restrict our study to clients of Big 6 (and later Big 5) auditors to control for brand name. Because industry specialization is unobservable, we use multiple proxies for it. After controlling for variables established in prior work to be related to DAC and the ERC, we find clients of industry specialist auditors have lower DAC and higher ERC than clients of nonspecialist auditors. This finding is consistent with clients of industry ...

Auditor Industry Specialization and Earnings Quality

This review paper argues that the institutions and sites of professionalization projects and regulatory processes matter. The institutions and locations where regulation takes place affect both the outcome of the regulatory process and the legitimacy of the rules and practices produced. Changes in regulatory processes affect opportunities for democratic control and legitimacy. A common position in the accounting literature is to examine both the process of professionalization and accounting and audit regulation within and around professional associations and related organizations, such as standard setting bodies and regulatory agencies. We argue that professional firms are increasingly important in professionalization and regulatory processes and have not received the attention that they warrant: an examination of the multi-national professional service firms (currently known as the Big 4) can enhance an understanding of professionalization and professional regulation. We suggest that these are important sites where accounting practices are themselves standardized and regulated, where accounting rules and standards are translated into practice, where professional identities are mediated, formed and transformed, and where important conceptions of personal, professional and corporate governance and management are transmitted.

Accounting, professions and regulation: Locating the sites of professionalization

Industry 4.0 provides new paradigms for the industrial management of SMEs. Supported by a growing number of new technologies, this concept appears more flexible and less expensive than traditional ...

The industrial management of SMEs in the era of Industry 4.0

This paper explores the effectiveness of Data Mining (DM) classification techniques in detecting firms that issue fraudulent financial statements (FFS) and deals with the identification of factors associated to FFS. In accomplishing the task of management fraud detection, auditors could be facilitated in their work by using Data Mining techniques. This study investigates the usefulness of Decision Trees, Neural Networks and Bayesian Belief Networks in the identification of fraudulent financial statements. The input vector is composed of ratios derived from financial statements. The three models are compared in terms of their performances.

https://isiarticles.com/bundles/Article/pre/pdf/22094.pdf

Data Mining techniques for the detection of fraudulent financial statements

In this study, we assess whether the liquidity of a closed-end mutual fund’s investments (measured based on the fund’s fair value disclosures) is related to the management fee charged by the fund’s investment advisor. We posit that there will be incremental effort on the part of the advisor to identify and analyze less liquid investments, and that fund investors would be willing to pay for these incremental costs to access less-liquid segments of the market. Consistent with this expectation, we find a significantly positive relationship between the percentage of level 3 assets (the least liquid securities) and management fees. However, we do not find a significant relationship between level 2 securities (which are more liquid than level 3, but less liquid than level 1) and management fees. Overall, our results suggest that investments in the least liquid securities result in higher management fees.

/pdf/asset-liquidity-and-mutual-fund-management-fees-evidence-25wf1ms0qk.pdf

Asset Liquidity and Mutual Fund Management Fees: Evidence from Closed-End Mutual Funds

Ethical climate and organizational commitment among management accountants

CEO duality occurs when the same individual holds both the CEO and board Chair positions. In some countries (such as Britain) CEO duality is considered to impair good corporate governance. In the United States, however, CEO duality is still a common practice. The Sarbanes–Oxley Act (SOX) included many corporate governance reforms, but the Act did not address the issue of CEO duality. However, we suggest that the corporate governance environment surrounding the passage of SOX may have influenced corporate board decisions regarding CEO duality when appointing new CEOs. In this study, we seek to determine whether CEO duality changed in the post-Sox environment by investigating the likelihood of CEO duality when CEO changes took place before and after SOX. Using a sample of 182 CEO succession events before and after the passage of SOX, we find that the likelihood of combining the CEO and Chair positions for newly appointed CEOs significantly decreased in the post-SOX period relative to the pre-SOX period. Our results suggest the SOX environment fostered a greater focus on governance issues even beyond the specific provisions of SOX.

CEO/Chair Duality in the Sarbanes–Oxley Era: Board Independence Versus Unity of Command

I. PROFESSIONAL RESPONSIBILITIES. GAAS: Carl Rusicka, CPA (Chicago Partnership Board). Charles Wessman, CPA (Intercontinental Resources). Russell Ponce (American Aircraft). KPMG (Structural Dynamics Research Corporation). Independence. Pricewaterhouse Coopers.J. Allen Seymour, CPA (Vista). II. INTERNAL CONTROL. Thor Industries. Waste Management. III. SPECIFIC ACCOUNTS/AREAS. Revenue Cycle. Sensormatic.Cylink.Carme.Home Theater Products International.Hybrid Networks.Expenditure Cycle. Richard Valde, CPA (Perry Drug).Chipwich.Craig Consumer Electronics.Aurora Foods.Micro Warehouse.Investment Cycle. Pier 1.Firstmark Corp.Other. Sony Corp. IV. AUDIT REPORTING. DCI Telecommunications. V. CASES COVERING MULTIPLE AREAS. Arthur Anderson. Cendant. Sunbeam. Sunrise Medical.

Charles P. Cullinan

Papers

Asset Liquidity and Mutual Fund Management Fees: Evidence from Closed-End Mutual Funds

Ethical climate and organizational commitment among management accountants

CEO/Chair Duality in the Sarbanes–Oxley Era: Board Independence Versus Unity of Command

Cases from the Sec Files: Topics in Auditing

CV Technologies/Cold-fX