Abstract
This study provides evidence on whether auditor independence-in-appearance, proxied by earnings response coefficients, is related to the non-audit fee ratio (non-audit to total fees from a client) or client importance (total fees from a client as a percentage of the total revenues of the audit firm). The results from large samples over the period 2001-2006 show, contrary to popular belief and the findings of some prior studies, that there is no evidence of a relation between perceived auditor independence and the non-audit fee ratio. However, perceived auditor independence is negatively associated with client importance, consistent with the economic theory of auditing. Our paper adds to the literature by examining the relative importance of non-audit fee ratios and client importance as determinants of independence-in-appearance.
| Original language | English |
|---|---|
| Pages (from-to) | 369-385 |
| Number of pages | 17 |
| Journal | Journal of Accounting and Public Policy |
| Volume | 28 |
| Issue number | 5 |
| DOIs | |
| Publication status | Published - 2009 Sep 1 |
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All Science Journal Classification (ASJC) codes
- Accounting
- Sociology and Political Science
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Audit and non-audit fees and capital market perceptions of auditor independence. / Ghosh, Aloke (Al); Kallapur, Sanjay; Moon, Doocheol.
In: Journal of Accounting and Public Policy, Vol. 28, No. 5, 01.09.2009, p. 369-385.Research output: Contribution to journal › Article
TY - JOUR
T1 - Audit and non-audit fees and capital market perceptions of auditor independence
AU - Ghosh, Aloke (Al)
AU - Kallapur, Sanjay
AU - Moon, Doocheol
PY - 2009/9/1
Y1 - 2009/9/1
N2 - This study provides evidence on whether auditor independence-in-appearance, proxied by earnings response coefficients, is related to the non-audit fee ratio (non-audit to total fees from a client) or client importance (total fees from a client as a percentage of the total revenues of the audit firm). The results from large samples over the period 2001-2006 show, contrary to popular belief and the findings of some prior studies, that there is no evidence of a relation between perceived auditor independence and the non-audit fee ratio. However, perceived auditor independence is negatively associated with client importance, consistent with the economic theory of auditing. Our paper adds to the literature by examining the relative importance of non-audit fee ratios and client importance as determinants of independence-in-appearance.
AB - This study provides evidence on whether auditor independence-in-appearance, proxied by earnings response coefficients, is related to the non-audit fee ratio (non-audit to total fees from a client) or client importance (total fees from a client as a percentage of the total revenues of the audit firm). The results from large samples over the period 2001-2006 show, contrary to popular belief and the findings of some prior studies, that there is no evidence of a relation between perceived auditor independence and the non-audit fee ratio. However, perceived auditor independence is negatively associated with client importance, consistent with the economic theory of auditing. Our paper adds to the literature by examining the relative importance of non-audit fee ratios and client importance as determinants of independence-in-appearance.
UR - http://www.scopus.com/inward/record.url?scp=69749110971&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=69749110971&partnerID=8YFLogxK
U2 - 10.1016/j.jaccpubpol.2009.07.001
DO - 10.1016/j.jaccpubpol.2009.07.001
M3 - Article
AN - SCOPUS:69749110971
VL - 28
SP - 369
EP - 385
JO - Journal of Accounting and Public Policy
JF - Journal of Accounting and Public Policy
SN - 0278-4254
IS - 5
ER -