scholarly journals Regulatory Spillovers in Common Audit Markets

2020 ◽  
Vol 66 (8) ◽  
pp. 3389-3411 ◽  
Author(s):  
Raphael Duguay ◽  
Michael Minnis ◽  
Andrew Sutherland
Keyword(s):  
Nonprofit Organizations ◽  
Private Companies ◽  
Demand Shock ◽  
Financial Reports ◽  
Public Companies ◽  
Audit Market ◽  
Sarbanes Oxley ◽  
Long Run ◽  
Audit Fee ◽  
Short Run

We find that Sarbanes–Oxley (SOX) had two significant effects on the audit market for nonpublic entities. The first short-run effect stems from inelastic labor supply coupled with an audit demand shock from public companies. As a result, private companies reduced their use of attested financial reports in bank financing by 12%, and audit fee increases for nonprofit organizations (NPOs) more than doubled. The second long-run effect was a transformation in the audit supply structure. After SOX, NPOs were less likely to match with auditors most exposed to public companies, whereas auditors increasingly specialized their offices based on client type. Audit market concentration for NPOs dropped by more than one-half within five years of SOX and remained at this level through the end of our sample in 2013, whereas the number of suppliers increased by 26%. Our results demonstrate how regulation directed at public companies generates economically important spillovers for nonpublic entities. This paper was accepted by Suraj Srinivasan, accounting.

Auditor Change and Auditor Choice in Nonprofit Organizations

2007 ◽  
Vol 26 (1) ◽  
pp. 47-70 ◽  
Author(s):  
Stefanie L. Tate
Keyword(s):  
Nonprofit Organizations ◽  
Public Support ◽  
Auditor Choice ◽  
Factors Associated ◽  
For Profit ◽  
Sarbanes Oxley ◽  
Audit Fee ◽  
Auditor Change ◽  
Operational Structure

As a result of the recent frauds and the U.S. Congress's passing of the Sarbanes-Oxley Act of 2002, more focus has been placed on the role of independent auditors in monitoring corporations. While the new rules are not directed toward nonprofit organizations, these organizations face many of the same monitoring concerns as their for-profit counterparts. Given their large reliance on public support through donations, it is imperative they maintain adequate levels of monitoring. This study looks at nonprofit organizations' auditor choice decisions—the factors associated with their decision to change auditors and the factors associated with the auditor selected if a change is made. Using multivariate regressions on data on almost 16,000 nonprofit organizations, I find changes in operational structure, management's reputation, and audit fee are all significant in determining whether an organization will change auditors. In addition, changes in operational structure, financing, and management contracting may have some effect on the type of auditor selected when a change is made.

scholarly journals Pengaruh Guncangan Kebijakan Moneter dan Variabel Makro Terhadap Dana Pihak Ketiga (DPK) Bank Syariah di Indonesia

2017 ◽  
Vol 4 (8) ◽  
pp. 642
Author(s):  
Mohammad Abdul Adim ◽  
Raditya Sukmana
Keyword(s):  
Monetary Policy ◽  
Secondary Data ◽  
Islamic Banks ◽  
Monetary Policy Shocks ◽  
Financial Reports ◽  
Vector Autoregressive ◽  
Long Run ◽  
Policy Shocks ◽  
Short Run ◽  
Effect Of Monetary Policy

The purpose of this research is to find out the effect of monetary policy shocks and macro variables towards Islamic banks deposits. The method that used in this researc his quantitative method and also using secondary data which obtained from financial reports and other reports started from 2005 until the end of 2015. Analysis technique used is Johansen Cointegration and Vector Autoregressive (VAR). The result are monetary policy shocks have affect significant on deposits Islamic banks in long run and short run. Furthermore, variables macroeckonomic like GDP and CPI have effect significant on deposits in Islamic banks. interestingly, the money supply in the long run have significant effect on Islaimc banks deposits, but in the short run does not have a significant effect on the deposits of Islamic banks.

scholarly journals A Retrospective Look at the Sarbanes-Oxley Act of 2002- Has it accomplished its original purpose?

2015 ◽  
Vol 31 (2) ◽  
pp. 585 ◽  
Author(s):  
Anthony Basile ◽  
Sheila Handy ◽  
Felisha N. Fret
Keyword(s):  
The United States ◽  
Regulatory Agencies ◽  
United States Congress ◽  
Publicly Traded ◽  
Private Companies ◽  
Public Companies ◽  
Publicly Traded Companies ◽  
Sarbanes Oxley ◽  
Policies And Procedures ◽  
Internal Framework

As a result of notable frauds including Enron, WorldCom and Waste Management, the United States Congress enacted the Sarbanes-Oxley Act of 2002 (SOX). The Act would forever change the accounting profession. After a little more than a decade, publicly traded companies have been able to create and implement policies and procedures to ensure compliance with the Act, specifically the provisions set forth in Section 404. Since all public companies have implemented SOX compliance together with other regulations imposed by the Internal Revenue Service and other regulatory agencies into their normal reporting routines, management of these companies have realized further benefits associated with SOX compliance. Because of these reported benefits many private companies have begun to voluntarily implement SOX-like policies and procedures into their own internal framework. This paper will discuss the perceptions of the enactment and implementation of the Act, the associated benefits derived from SOX compliance and reasons why private companies have begun voluntarily adopting SOX-like policiesprocedures and strategies.

Does Fee Disclosure Type Matter? Evidence from Price Adjustment in the Audit Market of Taiwan

2019 ◽  
Vol 18 (3) ◽  
pp. 41-61
Author(s):  
Jengfang Chen ◽  
Rong-Ruey Duh ◽  
Kuei-Fu Li
Keyword(s):  
Audit Quality ◽  
Audit Fees ◽  
Discretionary Accruals ◽  
Financial Statement ◽  
Price Adjustment ◽  
Regulatory Change ◽  
Public Companies ◽  
Audit Market ◽  
Audit Fee ◽  
The Impact

ABSTRACT While mandatory audit fee disclosure makes fee information transparent, there have been concerns about the impact of price adjustment on audit quality. Taking advantage of a regulatory change in Taiwan that required public companies to disclose audit fee but allowed two alternative disclosure forms (amount disclosure or range disclosure), this study investigates the impact of the fee disclosure form on price adjustment and the influence of such adjustment on audit quality. Using a dataset including audit fees under the two disclosure forms, we find that, for overcharged companies, the downward adjustment is larger for amount disclosure companies than range disclosure companies and such downward adjustment increase discretionary accruals in amount disclosure companies but not for range disclosure companies. Our study helps understand the impact of different fee disclosure forms on price adjustment and audit quality, which should be of interest to regulators and financial statement users in Taiwan and beyond.

The change in investor reaction to 10-K filings after Regulation Full Disclosure and the Sarbanes–Oxley Act

2019 ◽  
Vol 46 (1) ◽  
pp. 120-138
Author(s):  
Rakesh Bharati ◽  
Susan Crain ◽  
Shrikant Jategaonkar
Keyword(s):  
Stock Price ◽  
Financial Reports ◽  
Full Disclosure ◽  
Content Type ◽  
Sarbanes Oxley ◽  
Risk Adjustment Model ◽  
Long Run ◽  
One Year ◽  
The Impact ◽  
Investor Reaction

Purpose The purpose of this paper is to examine whether the investor reaction to 10-K filings has changed since the implementation of Regulation Full Disclosure (FD) and the Sarbanes–Oxley Act (SOX) and examine whether the market still underreacts to 10-K content and exhibits the continuation of filing day returns (FDRs) documented by You and Zhang (2009) after the passage of these regulations. Design/methodology/approach The sample consists of 39,270 10-K filings over the sample period of 1996 to 2012. Performance of portfolios created based on FDRs around 10-K filings is examined. Regression models are used for multivariate analysis. Carhart αs are obtained using the four-factor risk adjustment model. Findings By comparing investor reaction to 10-K filings pre- and post-regulation, the paper shows a significant change in stock price behavior since the implementation of FD and SOX. Analogous to Burks (2011), results suggest improved price efficiency around 10-K filings. In the long-run of up to one year following the filing, the continuation of FDRs documented by You and Zhang (2009) disappears post-2000, especially after the implementation of SOX. Overall findings suggest that investors price the information in 10-K filings significantly differently after FD and SOX than before. Research limitations/implications The sample ends in 2012. Therefore, this study does not examine the implications of the Dodd-Frank Act. Originality/value The paper contributes to the literature related to the impact of FD and SOX and market reaction to filings of financial reports. The current literature documents that there is a continuation of FDRs up to a year. This paper shows that the continuation has disappeared since FD and SOX were implemented.

Characteristics of Accounting Standards and SEC Review Comments

2013 ◽  
Vol 27 (4) ◽  
pp. 711-736 ◽  
Author(s):  
Jeff P. Boone ◽  
Cheryl L. Linthicum ◽  
April Poe
Keyword(s):  
Accounting Standards ◽  
Data Availability ◽  
Accounting Standard ◽  
Financial Reports ◽  
Public Companies ◽  
Sarbanes Oxley ◽  
Accounting Estimates

SYNOPSIS As mandated by Sarbanes-Oxley, the SEC reviews the financial reports of public companies and challenges the appropriateness of accounting that seems questionable or unclear. We investigate whether the likelihood of an SEC comment (challenge), and the time needed to resolve such comments, depends upon either of two characteristics of the underlying accounting standard—rules and accounting estimates. We find that the probability of an SEC comment increases with the rules-based characteristics in the standard, but find little evidence that time to resolution is related to such characteristics. We also find that the extent of estimates required to implement the standard is positively associated with both the probability of an SEC comment and the time to resolve the comment. Our findings should help inform the debate over the appropriate level of rules and estimates in GAAP, and are especially timely in light of the potential convergence between more rules-based U.S. GAAP and more principles-based IFRS GAAP. Data Availability: Data are available from public sources.

Adoption of Sarbanes-Oxley Measures by Nonprofit Organizations: An Empirical Study

2008 ◽  
Vol 22 (3) ◽  
pp. 255-277 ◽  
Author(s):  
Venkataraman M. Iyer ◽  
Ann L. Watkins
Keyword(s):  
Nonprofit Organizations ◽  
Audit Committee ◽  
Code Of Conduct ◽  
Internal Audit ◽  
Internal Controls ◽  
Financial Reports ◽  
Internal Auditors ◽  
Accountability Measures ◽  
Sarbanes Oxley ◽  
The Board Of Directors

SYNOPSIS: This paper reports the results of a survey of 215 nonprofit organizations to determine the degree to which these organizations have voluntarily adopted provisions of the Sarbanes-Oxley Act of 2002 (SOX). The authors believe that this research is timely and important as several states are considering implementing regulation that would have implications for stricter accountability measures for nonprofit organizations. Results indicate that many of the nonprofits in this survey have either already adopted governance measures similar to those prescribed by SOX or are in the process of doing so. The regression results indicate that size of budget, size of the board of directors, and proportion of independent members on the board are significantly related to the presence of an audit committee. Organizations engaging external or internal auditors are more likely to have a code of conduct and have periodic assessments of internal controls. The presence of an internal audit function is also significantly related to management certification of financial reports. The regression analysis on a composite SOX measure (which was calculated by summing the responses to questions on adoption of an audit committee, code of conduct, whistleblower protection, management certification of financial reports, and periodic assessments of internal controls) indicates that the presence of an external and/or an internal audit is significantly related to the adoption of such SOX measures.

Migration and US agricultural competitiveness

2013 ◽  
Vol 10 (2) ◽  
pp. 159-179 ◽  
Author(s):  
Philip L. Martin
Keyword(s):  
Farm Workers ◽  
Easy Access ◽  
Foreign Born ◽  
Guest Workers ◽  
Long Run ◽  
Short Run ◽  
Lower Wage ◽  
The Government ◽  
The One

Agriculture has one of the highest shares of foreign-born and unauthorized workers among US industries; over three-fourths of hired farm workers were born abroad, usually in Mexico, and over half of all farm workers are unauthorized. Farm employers are among the few to openly acknowledge their dependence on migrant and unauthorized workers, and they oppose efforts to reduce unauthorized migration unless the government legalizes currently illegal farm workers or provides easy access to legal guest workers. The effects of migrants on agricultural competitiveness are mixed. On the one hand, wages held down by migrants keep labour-intensive commodities competitive in the short run, but the fact that most labour-intensive commodities are shipped long distances means that long-run US competitiveness may be eroded as US farmers have fewer incentives to develop labour-saving and productivity-improving methods of farming and production in lower-wage countries expands.

Electricity consumption and economic growth in ASEAN

2017 ◽  
Vol 5 (2) ◽  
pp. 16
Author(s):  
Ahmad Ghazali Ismail ◽  
Arlinah Abd Rashid ◽  
Azlina Hanif
Keyword(s):  
Economic Growth ◽  
Energy Use ◽  
Electricity Consumption ◽  
Panel Estimation ◽  
Real Gdp ◽  
Long Run ◽  
Bidirectional Relationship ◽  
Short Run ◽  
Using Data ◽  
The Relationship

The relationship and causality direction between electricity consumption and economic growth is an important issue in the fields of energy economics and policies towards energy use. Extensive literatures has discussed the issue, but the array of findings provides anything but consensus on either the existence of relations or direction of causality between the variables. This study extends research in this area by studying the long-run and causal relations between economic growth, electricity consumption, labour and capital based on the neo-classical one sector aggregate production technology mode using data of electricity consumption and real GDP for ASEAN from the year 1983 to 2012. The analysis is conducted using advanced panel estimation approaches and found no causality in the short run while in the long-run, the results indicate that there are bidirectional relationship among variables. This study provides supplementary evidences of relationship between electricity consumption and economic growth in ASEAN.

Impact of exchange rate and oil price on the yield of sovereign bond and sukuk: Evidence from Malaysian capital market

2017 ◽  
Vol 5 (4) ◽  
pp. 27
Author(s):  
Huda Arshad ◽  
Ruhaini Muda ◽  
Ismah Osman
Keyword(s):  
Exchange Rate ◽  
Capital Market ◽  
Time Series Data ◽  
Oil Prices ◽  
Oil Price ◽  
Series Data ◽  
Sovereign Bond ◽  
Long Run ◽  
Short Run ◽  
The Impact

This study analyses the impact of exchange rate and oil prices on the yield of sovereign bond and sukuk for Malaysian capital market. This study aims to ascertain the effect of weakening Malaysian Ringgit and declining of crude oil price on the fixed income investors in the emerging capital market. This study utilises daily time series data of Malaysian exchange rate, oil price and the yield of Malaysian sovereign bond and sukuk from year 2006 until 2015. The findings show that the weakening of exchange rate and oil prices contribute different impacts in the short and long run. In the short run, the exchange rate and oil prices does not have a direct relation with the yield of sovereign bond and sukuk. However, in the long run, the result reveals that there is a significant relationship between exchange rate and oil prices on the yield of sovereign bond and sukuk. It is evident that only a unidirectional causality relation is present between exchange rate and oil price towards selected yield of Malaysian sovereign bond and sukuk. This study provides numerical and empirical insights on issues relating to capital market that supports public authorities and private institutions on their decision and policymaking process.

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