Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/33102
Title: The differential effects of auditors' nonaudit and audit fees on accrual quality
Authors: Srinidhi, BN
Gul, FA
Keywords: Accrual quality
Accruals
Audit fees
Economic bonding
Nonaudit fees
Issue Date: 2007
Publisher: Canadian Academic Accounting Assoc
Source: Contemporary accounting research, 2007, v. 24, no. 2, p. 595-629+306+313-314 How to cite?
Journal: Contemporary Accounting Research 
Abstract: This paper examines linkages between audit and nonaudit fees and accrual quality. We measure accrual quality by the Francis, Lafond, Olsson, and Schipper 2005 modification of the Dechow and Dichev 2002 measure. We posit that in settings where audit quality is compromised by a loss of auditor independence, managers use accruals more opportunistically and thereby drive down the accrual quality. Conversely, higher audit effort and quality translate to better accrual quality. Our dependent variables are the relative magnitude of nonaudit fees to audit fees and the absolute magnitudes of audit, nonaudit, and total fees. Results show that accrual quality has a significant negative association with the magnitude of nonaudit fees and a significant positive association with audit fees. This latter result is consistent with the proposition that higher audit fees reflect higher audit effort and better judgements about the propriety of accruals, but is not consistent with the proposition that audit fees are associated with economic bonding.
URI: http://hdl.handle.net/10397/33102
DOI: 10.1506/ARJ4-20P3-201K-3752
Appears in Collections:Journal/Magazine Article

Access
View full-text via PolyU eLinks SFX Query
Show full item record

SCOPUSTM   
Citations

91
Last Week
2
Last month
1
Citations as of Sep 23, 2017

WEB OF SCIENCETM
Citations

71
Last Week
2
Last month
0
Citations as of Sep 21, 2017

Page view(s)

42
Last Week
1
Last month
Checked on Sep 24, 2017

Google ScholarTM

Check

Altmetric



Items in DSpace are protected by copyright, with all rights reserved, unless otherwise indicated.