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Clive S. Lennox

Bio: Clive S. Lennox is an academic researcher from University of Southern California. The author has contributed to research in topics: Audit & Quality audit. The author has an hindex of 48, co-authored 113 publications receiving 9009 citations. Previous affiliations of Clive S. Lennox include Nanyang Technological University & University of New South Wales.


Papers
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Journal ArticleDOI
TL;DR: In this paper, the authors explain the challenges associated with the Heckman (1979) procedure to control for selection bias, assess the quality of its application in accounting research, and offer guidance for better implementation of selection models.
Abstract: This study explains the challenges associated with the Heckman (1979) procedure to control for selection bias, assesses the quality of its application in accounting research, and offers guidance for better implementation of selection models. A survey of 75 recent accounting articles in leading journals reveals that many researchers implement the technique in a mechanical way with relatively little appreciation of important econometric issues and problems surrounding its use. Using empirical examples motivated by prior research, we illustrate that selection models are fragile and can yield quite literally any possible outcome in response to fairly minor changes in model specification. We conclude with guidance on how researchers can better implement selection models that will provide more convincing evidence on potential selection bias, including the need to justify model specifications and careful sensitivity analyses with respect to robustness and multicollinearity. Data Availability: Data used...

1,171 citations

Journal ArticleDOI
TL;DR: In this paper, the effect of audit effort on earnings management using a unique database of hours worked by auditors on 9,738 audits in Greece between 1994 and 2002 was investigated.

559 citations

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TL;DR: This paper examined the causes of bankruptcy for a sample of 949 UK listed companies between 1987 and 1994 and found that the most important determinants of bankruptcy are profitability, leverage, cashflow, company size, industry sector and the economic cycle.

402 citations

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TL;DR: This article showed that companies would have received unfavourable reports more often under different switch decisions, indicating that companies do successfully engage in opinion-shopping and that they do not successfully switch auditors.

370 citations

Journal ArticleDOI
TL;DR: In this paper, the authors examined the association between Big Five audits and the incidence of accounting frauds committed by U.S. public companies between 1981 and 2001 and found that the Big Five are consistently associated with a lower incidence of fraudulent accounting, including in the last five years of their sample period when the number of frauds soared.
Abstract: We examine the association between Big Five audits and the incidence of accounting frauds allegedly committed by U.S. public companies between 1981 and 2001. Many commentators argue that the prominent financial reporting failures that led to major corporate governance reforms cast serious doubt on whether the large public accounting firms continue to supply relatively high-quality audits, especially in recent years. However, in unmatched and matched samples, we provide strong, robust evidence that fraudulent financial reporting becomes less likely with the presence of a Big Five auditor. Importantly, time-series tests suggest that the Big Five are consistently associated with a lower incidence of fraudulent accounting, including in the last five years of our sample period when the number of frauds soared. Moreover, we find evidence implying that these relations are causal rather than an artifact of endogeneity in auditor choice.

349 citations


Cited by
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Book
01 Jan 2009

8,216 citations

Journal ArticleDOI
01 May 1981
TL;DR: This chapter discusses Detecting Influential Observations and Outliers, a method for assessing Collinearity, and its applications in medicine and science.
Abstract: 1. Introduction and Overview. 2. Detecting Influential Observations and Outliers. 3. Detecting and Assessing Collinearity. 4. Applications and Remedies. 5. Research Issues and Directions for Extensions. Bibliography. Author Index. Subject Index.

4,948 citations

Journal ArticleDOI
TL;DR: This paper pointed out that the "quality" of earnings is a function of the firm's fundamental performance and suggested that the contribution of a firms fundamental performance to its earnings quality is suggested as one area for future work.
Abstract: Researchers have used various measures as indications of "earnings quality" including persistence, accruals, smoothness, timeliness, loss avoidance, investor responsiveness, and external indicators such as restatements and SEC enforcement releases. For each measure, we discuss causes of variation in the measure as well as consequences. We reach no single conclusion on what earnings quality is because "quality" is contingent on the decision context. We also point out that the "quality" of earnings is a function of the firm's fundamental performance. The contribution of a firm's fundamental performance to its earnings quality is suggested as one area for future work.

2,633 citations