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Non-Audit services, auditor independence and earnings management

Research output: Working paper

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Non-Audit services, auditor independence and earnings management. / Singh, A; Gore, J P O; Pope, P F.

Lancaster University : The Department of Accounting and Finance, 2001. (Accounting and Finance Working Paper Series).

Research output: Working paper

Harvard

Singh, A, Gore, JPO & Pope, PF 2001 'Non-Audit services, auditor independence and earnings management' Accounting and Finance Working Paper Series, The Department of Accounting and Finance, Lancaster University.

APA

Singh, A., Gore, J. P. O., & Pope, P. F. (2001). Non-Audit services, auditor independence and earnings management. (Accounting and Finance Working Paper Series). The Department of Accounting and Finance.

Vancouver

Singh A, Gore JPO, Pope PF. Non-Audit services, auditor independence and earnings management. Lancaster University: The Department of Accounting and Finance. 2001. (Accounting and Finance Working Paper Series).

Author

Singh, A ; Gore, J P O ; Pope, P F. / Non-Audit services, auditor independence and earnings management. Lancaster University : The Department of Accounting and Finance, 2001. (Accounting and Finance Working Paper Series).

Bibtex

@techreport{bb305b828cc34fb39475bdd8e25f4959,
title = "Non-Audit services, auditor independence and earnings management",
abstract = "We predict that the provision of non-audit services by auditors to their audit clients will impair independence more severely for smaller auditors than for large auditors. We report evidence that client earnings management activity to avoid losses and earnings decreases is positively associated with the ratio of non-audit fees to total fees for non-Big 5 auditors but not for Big 5 auditors. Earnings management to meet analysts' forecasts varies positively with the non-audit fee ratio for both Big 5 and non-Big 5 auditors. Further, the difference in the effectiveness of Big 5 and non-Big 5 auditors in constraining earnings management widens as the non-audit free ratio increases. These results suggest that, when the provision of non-audit services is relatively high, smaller auditors are less able to resist aggressive accounting by their clients.",
keywords = "Non-audit services, Auditor independence, Audit quality, Earnings management, Discretionary accurals.",
author = "A Singh and Gore, {J P O} and Pope, {P F}",
year = "2001",
language = "English",
series = "Accounting and Finance Working Paper Series",
publisher = "The Department of Accounting and Finance",
type = "WorkingPaper",
institution = "The Department of Accounting and Finance",

}

RIS

TY - UNPB

T1 - Non-Audit services, auditor independence and earnings management

AU - Singh, A

AU - Gore, J P O

AU - Pope, P F

PY - 2001

Y1 - 2001

N2 - We predict that the provision of non-audit services by auditors to their audit clients will impair independence more severely for smaller auditors than for large auditors. We report evidence that client earnings management activity to avoid losses and earnings decreases is positively associated with the ratio of non-audit fees to total fees for non-Big 5 auditors but not for Big 5 auditors. Earnings management to meet analysts' forecasts varies positively with the non-audit fee ratio for both Big 5 and non-Big 5 auditors. Further, the difference in the effectiveness of Big 5 and non-Big 5 auditors in constraining earnings management widens as the non-audit free ratio increases. These results suggest that, when the provision of non-audit services is relatively high, smaller auditors are less able to resist aggressive accounting by their clients.

AB - We predict that the provision of non-audit services by auditors to their audit clients will impair independence more severely for smaller auditors than for large auditors. We report evidence that client earnings management activity to avoid losses and earnings decreases is positively associated with the ratio of non-audit fees to total fees for non-Big 5 auditors but not for Big 5 auditors. Earnings management to meet analysts' forecasts varies positively with the non-audit fee ratio for both Big 5 and non-Big 5 auditors. Further, the difference in the effectiveness of Big 5 and non-Big 5 auditors in constraining earnings management widens as the non-audit free ratio increases. These results suggest that, when the provision of non-audit services is relatively high, smaller auditors are less able to resist aggressive accounting by their clients.

KW - Non-audit services

KW - Auditor independence

KW - Audit quality

KW - Earnings management

KW - Discretionary accurals.

M3 - Working paper

T3 - Accounting and Finance Working Paper Series

BT - Non-Audit services, auditor independence and earnings management

PB - The Department of Accounting and Finance

CY - Lancaster University

ER -