Are Client-Perceived Audit Firm Reputation and Audit Team Attributes Associated with Bign Audit Fees?

2004 ◽  
Author(s):  
El'fred Hian Yong Boo ◽  
Hian Chye Koh
Keyword(s):  
Audit Fees ◽  
Firm Reputation ◽  
Audit Firm ◽  
Audit Team ◽  
Team Attributes

scholarly journals Dinamika Kualitas Audit Di Perbankan Syariah Di Indonesia

2019 ◽  
Vol 5 (2) ◽  
pp. 177-194
Author(s):  
Riani Riani ◽  
Sepky Mardian
Keyword(s):  
Firm Size ◽  
Audit Quality ◽  
Maximum Level ◽  
Audit Fees ◽  
Firm Reputation ◽  
Audit Firm ◽  
Auditor Tenure ◽  
Independent Audit

This study discusses and understands the competence and independence of auditors on audit quality in sharia banking in Indonesia. While in the discussion the authors analyze the things that are deemed related to the competence and independent audit of auditor tenure or rotation seen through two post-KMK regime and post Act No. 5, Audit firm reputation by looking at audit firm size, audit fees, and auditor competencies determined through background education, certification, experience of work, and frequency of training that followed. The result of the research shows that the limitation of audit tenure does not decrease the quality of audit in sharia banking, the dynamics of audit quality is formed from independent relationship and auditor competence depends on the maximum level of audit

scholarly journals PERAN AUDIT FEE DAN FAKTOR YANG MEMPENGARUHI KUALITAS AUDIT

2021 ◽  
Vol 13 (1) ◽  
pp. 32-45
Author(s):  
Zalfa Shafira Qatrunnada ◽  
Siti Sundari
Keyword(s):  
Audit Quality ◽  
Hypothesis Test ◽  
Sampling Technique ◽  
Audit Fees ◽  
Firm Reputation ◽  
Quality Audit ◽  
Audit Firm ◽  
Purposive Sampling ◽  
Auditor Switching ◽  
Audit Fee

Abstract: This research purpose to obtain empirical evidence regarding factor that has an influence on audit quality, such as the audit firm reputation, audit tenure and auditor switching with audit fees as the moderating. Company of manufacturing consumer goods industry sector listed on the Indonesia Stock Exchange (IDX) in 2015-2019 are used as the population in this study. Used 115 samples wich determined by purposive sampling technique. This study used logistic regression analysis with SPSS v.26 as an analysis technique. The result of hypothesis test showed that audit firm reputation has no significant effect on audit quality, audit tenure has a positive and significant effect on audit quality, auditor switching has no significant effect on audit quality, audit fees are not moderate the effect of audit firm reputation on audit quality, audit fees are weaken the effect of audit tenure on audit quality, and audit fees are not moderate the effect of auditor switching on audit quality. Abstrak: Tujuan dari penelitian berikut untuk memperoleh bukti empiris mengenai sejumlah faktor yang memberikan pengaruh terhadap kualitas audit seperti reputasi KAP, audit tenure dan auditor switching dengan audit fee sebagai pemoderasi pada perusahaan manufaktur bidang industri barang konsumsi yang terdaftar pada Bursa Efek Indonesia periode tahun 2015-2019. Sampel penelitian berjumlah 115 pengamatan yang ditetapkan dengan metode purposive sampling. Analisis data menggunakan regresi logistic dengan memanfatkan perangkat lunak SPSS v.26. Hasil penelitian menunjukkan audit tenure berpengaruh positif dan signifikan terhadap kualitas audit, sedangkan reputasi KAP dan auditor switching tidak berpengaruh signifikan terhadap kualitas audit. Selain itu, audit fee memperlemah pengaruh audit tenure terhadap kualitas audit, namun audit fee tidak mampu memoderasi pengaruh auditor switching dan reputasi KAP terhadap kualitas audit.

Fee Discounting and Audit Quality Following Audit Firm and Audit Partner Changes: Chinese Evidence

2014 ◽  
Vol 90 (4) ◽  
pp. 1517-1546 ◽  
Author(s):  
Hua-Wei Huang ◽  
K Raghunandan ◽  
Ting-Chiao Huang ◽  
Jeng-Ren Chiou
Keyword(s):  
Earnings Management ◽  
Audit Quality ◽  
Audit Fees ◽  
Audit Firm ◽  
Audit Fee ◽  
Significant Attention

ABSTRACT Issues related to low-balling of initial year audit fees and the resultant impact on audit quality have received significant attention from regulators in many countries. Using 9,684 observations from China during the years 2002–2011, we find that there is a significant initial year audit fee discount following an audit firm change when both of the signing audit partners are different from the prior year. The evidence is mixed if one or both of the signing partners from the prior year also moves with the client to the new audit firm. We find evidence of audit fee discounting in our analysis of fee levels, but not in our analysis of changes in audit fees from the prior year. Sanctions for problem audits and greater earnings management are more likely when there is an audit firm change that involves two new signing partners together with initial year audit fee discounting.

The Effect of Office Changes within Audit Firms on Clients' Audit Quality and Audit Fees

2020 ◽  
Vol 39 (1) ◽  
pp. 71-99
Author(s):  
Carl W. Hollingsworth ◽  
Terry L. Neal ◽  
Colin D. Reid
Keyword(s):  
Audit Quality ◽  
Audit Fees ◽  
Additional Analysis ◽  
Audit Firm ◽  
Audit Firms ◽  
Audit Fee ◽  
The Impact ◽  
Audit Partner Rotation

SUMMARY While prior research has examined audit firm and audit partner rotation, we have little evidence on the impact of within-firm engagement team disruptions on the audit. To examine these disruptions, we identify a unique sample of companies where the audit firm issuing office changed but the audit firm did not change and investigate the effect of these changes on the audit. Our results indicate that companies that have a change in their audit firm's issuing office exhibit a decrease in audit quality and an increase in audit fees. In additional analysis, we partition office changes into two groups—client driven changes and audit firm driven changes. This analysis reveals that client driven changes are more likely to result in a higher audit fee while audit quality is unchanged. Conversely, audit firm driven changes do not result in a higher audit fee but do experience a decrease in audit quality.

How do audit team industry and client‐specific experience impact audit effort and audit fees?

2021 ◽  
Vol 25 (1) ◽  
pp. 249-268
Author(s):  
Christine Contessotto ◽  
W. Robert Knechel ◽  
Robyn Moroney
Keyword(s):  
Audit Fees ◽  
Specific Experience ◽  
Audit Team

scholarly journals DETERMINAN KUALITAS AUDIT DAN FAKTOR-FAKTOR YANG BERPENGARUH TERHADAP AUDITEE SATISFACTION (STUDI EMPIRIS PADA AUDITOR INTERNAL BANK UMUM SYARIAH DI INDONESIA)

2017 ◽  
Vol 14 (1) ◽  
pp. 27
Author(s):  
Hermi ,
Keyword(s):  
Structural Equation ◽  
Audit Quality ◽  
Primary Data ◽  
Validity And Reliability ◽  
Cross Sectional ◽  
Firm Reputation ◽  
Quality Audit ◽  
Audit Firm ◽  
Work Ethics ◽  
Service Portfolio

<p>The purpose of this study is to analyze the influence of Independence, Competence<br />and Islamic work Ethics partially and simultaneously to the Audit Quality . The next<br />purpose is to analyze the influence of Audit Quality, Audit Services Portfolio and Audit<br />Firm Reputation partially and simultaneously against Auditee Satisfaction on Islamic<br />Banks in Indonesia. This study is expected to provide benefit to the development of<br />knowledge, particularly in the field of accounting and auditing, Government, Islamic<br />Bank, Indonesian Institute of Accountants (IAI ), Indonesian Institute of Certified Public<br />Accountants (IAP ), the auditors and the Audit Firm (KAP). The results are expected to<br />provide information for various parties accurately and meaningfully as a solution to<br />determine the variables that affect the Auditee Satisfaction and Audit Quality at Islamic<br />Bank in Indonesia. Limitations of the study include: (1) The extent of the problem which<br />studied in determining the factors that can affect the Audit Quality and Auditee Satisfaction<br />in Islamic Bank in Indonesia , (2) Limitation of the study lies in the data acquisition, (3)<br />This study only emphasized the perception of the factors that may affect Audit Quality and<br />Auditee Satisfaction.<br />This study used primary data through questionnaires with the population of<br />internal auditors of Islamic Banks in Indonesia. This study used a quantitative approach<br />and in terms of the type of investigation, this study is causal. Based on the time horizon<br />the study is cross-sectional (one - shot ) because the data was collected only once . Before using the data to test hypothesis, the validity and reliability test should be done first.</p><p>Data analysis uses Structural Equation Model (SEM) supported by AMOS software.<br />Based on the test results, it shows that Independence, Competence and Islamic work<br />Ethics partially or simultaneously affect the Audit Quality significantly. The next stage of<br />testing Audit Quality partially has no significant effect on the Auditee Satisfaction. While<br />Audit Service Portfolio and Audit Firm Reputation either partially or simultaneously<br />have significant effect on the Auditee Satisfaction. Simultaneously the three variables<br />Audit Quality, and Audit Services Portfolio and Reputation of Audit Firm have<br />significant effect on the Auditee Satisfaction. .<br />Keywords: Independence, Competence, Islamic Work Ethics, Audit Quality, Audit Services<br />Portfolio, Audit Firm Reputation and Auditee Satisfaction.</p>

A New Approach to Estimating the Relation between Audit Fees and Financial Misconduct

2019 ◽  
Vol 34 (2) ◽  
pp. 41-61 ◽  
Author(s):  
Bidisha Chakrabarty ◽  
Scott Duellman ◽  
Michael A. Hyman
Keyword(s):  
Selection Bias ◽  
Audit Fees ◽  
Governance Structure ◽  
Small Sample ◽  
New Approach ◽  
Audit Firm ◽  
Public Firms ◽  
Financial Misconduct ◽  
Systematic Selection ◽  
The Impact

SYNOPSIS Research on the association between abnormal audit fees (measuring audit effort) and financial misconduct has produced mixed results. The use of actual misstatements in this research creates small-sample inferences, introduces systematic selection bias, and reduces the scope of sample coverage. In this study we use a metric based on Benford's Law to analyze the impact of abnormal audit fees on the likelihood of misconduct. This measure is parsimonious, avoids selection bias, and can be computed for a large sample of public firms. Consistent with theory, we find that greater audit effort reduces the likelihood of misconduct and auditor resignations are more likely for clients with higher misconduct likelihood. Our findings are not driven by audit firm size, client size, the governance structure of the client, or economic bonding explanations. The effect is not subsumed when controlling for alternative misconduct measurement metrics and is robust across multiple tests to address endogeneity. JEL Classifications: G32; M41.

The Market for Audit Services: The Role of Market Power

2020 ◽  
Vol 19 (3) ◽  
pp. 3-8
Author(s):  
Tracy Ti Gu ◽  
Dan A. Simunic ◽  
Michael T. Stein ◽  
Minlei Ye ◽  
Ping Zhang
Keyword(s):  
Market Power ◽  
Firm Size ◽  
Academic Research ◽  
Audit Fees ◽  
Local Market ◽  
Capital Investments ◽  
Audit Firm ◽  
Big 4 ◽  
The Subject

ABSTRACT The market for audit services has been the subject of extensive academic research since the 1970s. The prevailing view is that audit markets are characterized by tiers of suppliers (Big 4 versus non-Big 4, and industry specialists versus non-specialists) where the upper tier suppliers produce and sell a systematically higher level of assurance, while competition among suppliers within tiers is essentially perfect and a uniform price prevails within the submarkets. We discuss three papers that challenge this orthodoxy. These papers argue and find that the price of an audit is essentially unique to each (auditor, client) pair and that this price depends on both audit firm size and client size. Furthermore, audit firm size is linked with the firm's capital investments, which enhance auditor efficiency and market power. We conclude that audit markets are atomistic and that local market power is an important determinant of audit prices and audit fees.

Does audit quality mediate the relationship between audit firm size and audit fees

2019 ◽  
Vol 6 (4) ◽  
pp. 279
Author(s):  
Ayman Bader ◽  
Mohammad Ebrahim Nawaiseh ◽  
Halla Noor Nawaiseh
Keyword(s):  
Firm Size ◽  
Audit Quality ◽  
Audit Fees ◽  
Audit Firm ◽  
The Relationship

scholarly journals Mandatory Audit Firm Rotation for Listed Companies: The Effects in the Netherlands

2020 ◽  
Vol 21 (4) ◽  
pp. 937-966
Author(s):  
Bas de Jong ◽  
Steven Hijink ◽  
Lars in ’t Veld
Keyword(s):  
The Netherlands ◽  
Public Interest ◽  
Audit Quality ◽  
Audit Fees ◽  
Listed Companies ◽  
First Year ◽  
Financial Reports ◽  
Audit Firm ◽  
Negative Effect ◽  
Mandatory Audit Firm Rotation

AbstractThe Audit Regulation was adopted in 2014 to address many of the perceived failings in the market for statutory audits. It introduced mandatory audit firm rotation for public-interest entities, including listed companies, as of 17 June 2020/2023. Mandatory audit firm rotation was also considered by the Dutch legislator in 2012. Therefore, many Dutch listed companies had already switched audit firm in anticipation of the national requirement. In this article, we investigate the effects of mandatory audit firm rotation in the Netherlands by examining the financial reports of Dutch listed firms over the financial years 2012–2016 and by conducting a survey among stakeholders. We conclude that there is broad support for mandatory audit firm rotation in the Netherlands. Although mandatory audit firm rotation was seen as controversial at the time of adoption, it is now considered desirable by various stakeholders, including auditors themselves. However, mandatory audit firm rotation appears to have had some adverse effects. Most notably, our study shows a higher probability of errors in first year audits. The discount in audit fees provided by audit firms to lucrative larger public-interest entities for first year audits—the trophy client effect—may exacerbate the negative effect on audit quality. The Audit Regulation’s goals to improve the market for statutory audits have not been met so far.

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