Changing the Institutional Framework of Statutory Audit: Internal Stakeholders' Perceptions of the Associated Benefit and Costs

References

• Allee, K. D., & Yohn, T. L. (2009). The demand for financial statements in an unregulated environment: An examination of the production and use of financial statements by privately held small businesses. The Accounting Review, 84(1), 1–25. doi:10.2308/accr.2009.84.1.1
   Web of Science ®Google Scholar
• Arruñada, B., & Paz-Arres, C. (1997). Mandatory rotation of company auditors: A critical examination. International Review of Law and Economics, 17, 31–61. doi:10.1016/S0144-8188(96)00063-4
   Web of Science ®Google Scholar
• Bartunek, J. M., & Murninghan, J. K. (1984). The nominal group technique: Expanding the basic procedure and underlying assumptions. Group & Organization Studies, 9(3), 417–432. doi:10.1177/105960118400900307
   Google Scholar
• Beattie, V., & Fearnley, S. (1995). The importance of audit firm characteristics and the drivers of auditor change in UK listed companies. Accounting & Business Research, 25(100), 227–239. doi:10.1080/00014788.1995.9729912
   Google Scholar
• Beattie, V., Fearnley, S., & Hines, T. (2013). Perceptions of factors affecting audit quality in the post-SOX UK regulatory environment. Accounting and Business Research, 43(1), 56–81. doi:10.1080/00014788.2012.703079
   Web of Science ®Google Scholar
• Black, B., Jang, H., & Kim, W. (2006). Does corporate governance predict firms’ market values? Evidence from the Korean Market. Journal of Law, Economics, and Organization, 22(2), 366–413. doi:10.1093/jleo/ewj018
   Web of Science ®Google Scholar
• Boone, J. P., Khurana, I. K., & Raman, K. K. (2008). Audit firm tenure and the equity risk premium. Journal of Accounting, Auditing, and Finance, 23(1), 115–140.
   Google Scholar
• Cameran, M., Francis, J. R., Marra, A., & Pettinicchio, A. K. (2013). Are there adverse consequences of mandatory auditor rotation? Evidence from the Italian experience. Working Paper. Bocconi University, Milan, and University of Missouri at Columbia.
   Google Scholar
• Carcello, J. V., Hermanson, R. H., & McGrath, N. T. (1992). Audit quality attributes: The perceptions of audit partners, preparers, and financial statement users. Auditing: A Journal of Practice and Theory, 11(1), 1–15.
   Web of Science ®Google Scholar
• Carpenter, T. D., & Reimers, J. L. (2013). Professional skepticism: The effects of a partner's influence and the level of fraud indicators on auditors’ fraud judgments and actions. Behavioral Research in Auditing, 25(2), 45–69. doi:10.2308/bria-50468
   Google Scholar
• Catanach, A. H., & Walker, P. L. (1999). The international debate over mandatory auditor rotation: A conceptual research framework. Journal of International Accounting, Auditing & Taxation, 8(1), 43–66. doi:10.1016/S1061-9518(99)00004-X
   Google Scholar
• Causholli, M. (2009). Audits as credence goods: What do auditors know and how do they use their information. (Ph.D. dissertation). University of Florida, Gainesville.
   Google Scholar
• Chen, G., Firth, M., Daniel, N. G., & Rui, O. M. (2006). Ownership structure, corporate governance, and fraud: Evidence from China. Journal of Corporate Finance, 12(3), 424–448. doi:10.1016/j.jcorpfin.2005.09.002
   Web of Science ®Google Scholar
• Cotter, J., Shivdasani, A., & Zenner, M. (1997). Do independent directors enhance target shareholder wealth during tender offers? Journal of Financial Economics, 43(2), 195–218. doi:10.1016/S0304-405X(96)00886-0
   Web of Science ®Google Scholar
• Daniels, B. W., & Booker, Q. (2011). The effects of audit firm rotation on perceived auditor independence and audit quality. Research in Accounting Regulation, 23, 78–82. doi:10.1016/j.racreg.2011.03.008
   Google Scholar
• DeAngelo, L. E. (1981). Auditor size and audit quality. Journal of Accounting and Economics, 3(3), 183–189. doi:10.1016/0165-4101(81)90002-1
   Google Scholar
• Deis, R. D., & Giroux, G. A. (1992). Determinants of audit quality in the public sector. The Accounting Review, 67(3), 462–479.
   Web of Science ®Google Scholar
• Deumes, R., Meuwissen, R., Peek, E., Schelleman, C., & Vanstraelen, A. (2010). The value of audit – Research project commissioned by the Standards Working Group. Maastricht: Global Public Policy Committee.
   Google Scholar
• Dopuch, N. R., King, R., & Schwartz, R. (2001). An experimental investigation of retention and rotation requirements. Journal of Accounting Research, 39(1), 93–117. doi:10.1111/1475-679X.00005
   Web of Science ®Google Scholar
• Duff, A. (2004). Auditqual: Dimensions of audit quality. Edinburgh: The Institute of Chartered Accountants in Scotland.
   Google Scholar
• European Commission. (2010). Green Paper, Audit Policy: Lessons from the Crisis, COM (2010) 561 final, Brussels.
   Google Scholar
• European Commission. (2011). Commission Staff Working Paper Impact Assessment Accompanying the Document Proposal for a Directive of the European Parliament and of the Council Amending Directive 2006/43/EC on Statutory Audits of Annual Accounts and Consolidated Accounts and a Proposal for a Regulation of the European Parliament and of the Council on Specific Requirements Regarding Statutory Audit of Public-interest Entities, COM(2011) 779 final, SEC(2011)1385 final, Brussels.
   Google Scholar
• European Commission. (2014a). Directive 2014/56/EU of the European Parliament and of the Council amending Directive 2006/43/EC on statutory audits of annual accounts and consolidated accounts, OJ L158/196-226 of 27 May 2014, Brussels.
   Google Scholar
• European Commission. (2014b). Regulation (EU) No 537/2014 of the European Parliament and of the Council of 16 April 2014 on specific requirements regarding statutory audit of public-interest entities and repealing Commission Decision 2005/909/EC, OJ L158/77-112 of 27 May 2014, Brussels.
   Google Scholar
• European Commission Impact Assessment Board. (2011). Opinion Impact Asses sment on a proposal for a regulation on statutory audits of public interest companies and amending Directive 2006/43/EC, Ref. Ares(2011)774675–15/07/2011, Brussels.
   Google Scholar
• Ewelt-Knauer, C., Gold, A., & Pott, C. (2013). Mandatory audit firm rotation: A review of stakeholder perspectives and prior research. Accounting in Europe, 10(1), 27–41. doi:10.1080/17449480.2013.772717
   Google Scholar
• Francis, J. R., & Ke, B. (2005). Disclosure of fees paid to auditors and the market valuation of earnings surprises. Review of Accounting Studies, 11(2–3), 495–523.
   Google Scholar
• Gonthier-Besacier, N., Hottegindre, G., & Fine-Falcy, S. (2011). Audit quality attributes: The French auditors’ perception on a strong regulatory context. Paper presented at the Symposium of the European Auditing Research Network, Bergen, Norway.
   Google Scholar
• Haapamäki, E., Järvinen, T., Niemi, L., & Zerni, M. (2012). Do Joint audits offer value for money? Abnormal accruals, earnings conservatism, and auditor remuneration in a setting of voluntary joint audits. European Accounting Review, 21(4), 731–765. doi:10.1080/09638180.2012.678599
   Web of Science ®Google Scholar
• Hassink, H. F. D., Bollen, L. H., Meuwissen, R. H. G., & de Vries, M. J. (2009). Corporate fraud and the audit expectations gap, a study among business managers. Journal of International Accounting, Auditing, & Taxation, 18(2), 85–100. doi:10.1016/j.intaccaudtax.2009.05.003
   Google Scholar
• Hay, D., Knechel, R., & Li, V. (2006). Non-audit services and auditor independence: New Zealand evidence. Journal of Business, Finance, & Accounting, 33(5–6), 715–734. doi:10.1111/j.1468-5957.2006.00602.x
   Web of Science ®Google Scholar
• Hayes, C., Mock, T., & Monroe, G. (2012). The effect of corporate governance in moderating the impact of non-audit services on perceived auditor independence. Working Paper, Australian National University, Canberra.
   Google Scholar
• Hirshleifer, D. (2008). Psychological bias as a driver of financial regulation. European Financial Management, 14(5), 856–874. doi:10.1111/j.1468-036X.2007.00437.x
   Web of Science ®Google Scholar
• Holm, C., & Thinggaard, F. (2010). Joint audits – Benefit or burden? Paper presented at the European Accounting Association 33rd Annual Congress 2010, Istanbul, Turkey.
   Google Scholar
• Huang, H.-W., Mishra, S., & Raghunandan, K. (2007). Types of nonaudit fees and financial reporting quality. Auditing: A Journal of Practice and Theory, 26(1), 133–145. doi: 10.2308/aud.2007.26.1.133
   Web of Science ®Google Scholar
• Hussey, R., & Lan, G. (2001). An examination of auditor independence issues from the perspectives of U.K. Finance Directors. Journal of Business Ethics, 32(2), 169–178. doi:10.1023/A:1010636122383
   Web of Science ®Google Scholar
• Institute of Chartered Accountants in England and Wales. (2002). Mandatory rotation of audit firms. Review of current requirements, research and publications. London: ICAEW.
   Google Scholar
• International Accounting Standards Board (IASB). (2010). The conceptual framework for financial reporting. London: International Financial Reporting Standards Foundation.
   Google Scholar
• Kaplan, S., & Mauldin, E. G. (2008). Auditor rotation and the appearance of independence: Evidence from non-professional investors. Journal of Accounting and Public Policy, 27(2), 177–192. doi:10.1016/j.jaccpubpol.2008.01.004
   Web of Science ®Google Scholar
• Khurana, I. K., & Raman, K. K. (2006). Do investors care about the auditor's economic dependence on the client? Contemporary Accounting Research, 23(4), 977–1016. doi:10.1506/D171-8534-4458-K037
   Web of Science ®Google Scholar
• Kim, J.-B., Simunic, D. A., Stein, M. T., & Yi, C. H. (2011). Voluntary audits and the cost of debt capital for privately held firms: Korean evidence. Contemporary Accounting Research, 28(2), 585–615. doi:10.1111/j.1911-3846.2010.01054.x
   Web of Science ®Google Scholar
• Kinney, W. R., Palmrose, Z.-V., & Scholz, S. (2004). Auditor independence, non-audit services, and restatements: Was the U.S. Government Right? Journal of Accounting Research, 42(3), 561–588. doi:10.1111/j.1475-679X.2004.t01-1-00141.x
   Web of Science ®Google Scholar
• Knapp, M. C. (1991). Factors that audit committee members use as surrogates for audit quality. Auditing: A Journal of Practice & Theory, 10(1), 35–52.
   Web of Science ®Google Scholar
• Knechel, W. R., Krishnan, G. V., Pevzner, M., Shefchik, L. B., & Velury, U. K. (2013). Audit quality: Insights from the academic literature. Auditing: A Journal of Practice and Theory, 32(Supplement), 385–421. doi: 10.2308/ajpt-50350
   Web of Science ®Google Scholar
• Köhler, A. G., Marten, K.-U., Quick, R., & Ruhnke, K. (2008). Audit regulation in Germany: Improvements driven by internationalization. In R. Quick, S. Turley, & M. Willekens (Eds.), Auditing, trust and governance. Developing regulation in Europe (pp. 111–143). London: Routledge.
   Google Scholar
• Kunda, Z. (1990). The case for motivated reasoning. Psychological Bulletin, 108(3), 480–498. doi:10.1037/0033-2909.108.3.480
   PubMed Web of Science ®Google Scholar
• Lampe, J. C., & Sutton, S. G. (1992). International auditing: Cross-cultural impacts on quality. Advances in International Accounting, 1992, 213–266.
   Google Scholar
• Lo, A. W. Y., Wong, R., & Firth, M. (2010). Can corporate governance deter management from manipulation earnings? Evidence from related-party sales transactions in China. Journal of Corporate Finance, 16(2), 225–235. doi:10.1016/j.jcorpfin.2009.11.002
   Web of Science ®Google Scholar
• Lundgren, S. R., & Prislin, R. (1998). Motivated cognitive processing and attitude change. Personality and Social Psychology Bulletin, 24(7), 715–726. doi:10.1177/0146167298247004
   Web of Science ®Google Scholar
• Mattessich, R. (1995). Conditional-normative accounting methodology: Incorporating value judgements and means-end relations of an applied science. Accounting, Organizations & Society, 20(4), 259–284. doi:10.1016/0361-3682(94)00023-O
   Web of Science ®Google Scholar
• Menon, K., & Williams, D. D. (2010). Investor reaction to going concern audit reports. The Accounting Review, 85(6), 2075–2105. doi: 10.2308/accr.2010.85.6.2075
   Web of Science ®Google Scholar
• Meuwissen, R., & Quick, R. (2009). Abschlussprüfung und Beratung – Eine experimentelle Analyse der Auswirkungen auf Unabhängigkeitswahrnehmungen deutscher Aufsichtsräte. Zeitschrift für betriebswirtschaftliche Forschung, 61(4), 382–415.
   Google Scholar
• Mura, R. (2007). Firm performance: Do non-executive directors have minds of their own? Evidence from UK panel data. Financial Management, 36(3), 81–112. doi:10.1111/j.1755-053X.2007.tb00082.x
   Web of Science ®Google Scholar
• O'Leary, C. (1996). Compulsory rotation of audit firms for public companies? Accountancy Ireland, 4, 20–22.
   Google Scholar
• O'Leary, C., & Radich, R. (1996). Audit firm rotation and independence: Australian evidence. Accountability and Performance, 2(3), 37–58.
   Google Scholar
• Perry, T., & Shivdasani, A. (2005). Do boards affect performance? Evidence from corporate restructuring. Journal of Business, 78(4), 1403–1431. doi:10.1086/430864
   Google Scholar
• Porter, B., Ó hÓgartaigh, C., & Baskerville, R. (2012a). Audit expectation-performance gap revisited: Evidence from New Zealand and the United Kingdom part 1: The gap in New Zealand and the United Kingdom in 2008. International Journal of Auditing, 16(2), 101–129. doi:10.1111/j.1099-1123.2011.00443.x
   Google Scholar
• Porter, B., Ó hÓgartaigh, C., & Baskerville, R. (2012b). Audit Expectation-performance gap revisited: Evidence from New Zealand and the United Kingdom Part 2: Changes in the Gap in New Zealand 1989–2008 and in the United Kingdom 1999–2008. International Journal of Auditing, 16(3), 215–247. doi:10.1111/j.1099-1123.2011.00444.x
   Google Scholar
• Public Company Accounting Oversight Board. (2011). Concept release on auditor independence and audit firm rotation. Public Company Accounting Oversight Board Release No. 2011-006 of August 16, 2011.
   Google Scholar
• Quick, R., Turley, S., and Willekens, M. (Eds.). (2008). Auditing, trust and governance, developing regulation in Europe. London: Routledge.
   Google Scholar
• Ratzinger-Sakel, N. V. S., Audousset-Coulier, S., Kettunen, J., & Lésage, C. (2013). Joint audit: Issues and challenges for researchers and policy-makers. Accounting in Europe, 10(2), 175–199. doi:10.1080/17449480.2013.834725
   Google Scholar
• Robinson, D. (2008). Auditor independence and auditor-provided tax service: Evidence from going-concern audit opinions prior to bankruptcy filings. Auditing: A Journal of Practice and Theory, 27(2), 31–54. doi:10.2308/aud.2008.27.2.31
   Web of Science ®Google Scholar
• Ruhnke, K., & Schmidt, M. (2014). Misstatements in financial statements: The relationship between inherent and control risk factors and audit adjustments. Auditing: A Journal of Practice & Theory. doi: 10.2308/ajpt-50784
   Web of Science ®Google Scholar
• Ruhnke, K., Schmiele, C., & Schwind, J. (2010). Die Erwartungslücke als permanentes Phänomen der Abschlussprüfung – Definitionsansatz, empirische Untersuchung und Schlussfolgerungen. Zeitschrift für Betriebswirtschaftliche Forschung, 62(4), 394–421.
   Google Scholar
• Ruiz-Barbadillo, E., Gómez-Aguilar, N., & Carrera, N. (2009). Does mandatory audit firm rotation enhance auditor independence? Evidence from Spain. Auditing: A Journal of Practice and Theory, 28(1), 113–135. doi:10.2308/aud.2009.28.1.113
   Web of Science ®Google Scholar
• Schatzberg, J. W. (1994). A new examination of auditor ‘low ball’ pricing: Theoretical model and experimental evidence. Auditing: A Journal of Practice & Theory, 13(Supplement), 33–55.
   Google Scholar
• Stoel, D., Havelka, D., & Merhout, J. W. (2012). An analysis of attributes that impact information technology audit quality: A study of IT and financial audit practitioners. International Journal of Accounting Information Systems, 13(1), 60–79. doi:10.1016/j.accinf.2011.11.001
   Google Scholar
• Sucher, P., Moizer, P., & Zarova, M. (1998). Factors affecting the assessment of the quality of a company's auditors: The case of the czech republic. International Journal of Auditing, 2(1), 7–20.
   Google Scholar
• Sutton, S. G., & Lampe, J. C. (1991). A framework for evaluating process quality for audit engagements. Accounting & Business Research, 21(83), 275–288. doi:10.1080/00014788.1991.9729841
   Google Scholar
• Svanström, T. (2013). Non-audit services and audit quality: Evidence from private firms. European Accounting Review, 22(2), 337–366. doi:10.1080/09638180.2012.706398
   Web of Science ®Google Scholar
• Warming-Rasmussen, B., & Jensen, L. (1998). Quality dimensions in external audit services – An external user perspective. European Accounting Review, 7(1), 65–82. doi:10.1080/096381898336583
   Google Scholar
• Willekens, M. (2008). De Toegevoegde Waarde van de Audit. Bruges: die Keure.
   Google Scholar