Work

Do Non–Audit Service Fees Impair Auditor Independence? Evidence from Going Concern Audit Opinions

Year: 2002

Type: article

Abstract: We find no significant association between non–audit service fees and impaired auditor independence, where auditor independence is surrogated by auditors’ propensity to issue going concern audit opinions. We also find no association between going concern opinions and either total fees or audit fees. In addition, our findings are robust to controlling for unexpected fees, to controlling for endogeneity among our variables, and to several alternative research design specifications. Our results are consistent with market–based incentives, such as loss of reputation and litigation costs, dominating the expected benefits from compromising auditor independence.

Source: Journal of Accounting Research

DOI: 10.1111/1475-679x.00088

Authors: Mark L. DeFond, K. Raghunandan, K.R. Subramanyam

Institutions: University of Southern California, Texas A&M International University

Language: English

Topic: Auditing, Earnings Management, Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

Open Access status: bronze

OpenAlex ID: W3123370968

FWCI: 134.2

Cites: 26

Cited by: 1,344

Related to: 10