No description available.

The Sarbanes-Oxley Act made audit committees directly responsible for the appointment, compensation, and supervision of companies' auditors. Limited research in the auditor selection process and PCAOB inspections suggest that managers, not audit committees, may still be selecting the auditors, and that inspection reports are not useful. This study addresses both of these areas. This paper considers two theories of governance, Agency Theory and Institution Theory, to analyze the audit committee members' auditor selection process. The study examines whether Audit Committee Members use two specific types of audit quality indicators, other than managers' recommendation, in evaluating auditors. In a setting where the manager recommends the auditor, the auditors' inspection results (favorable/unfavorable) and a prior manager/auditor affiliation (absent/present) are manipulated in a between-subject research design, using financially literate professionals as a proxy for audit committee members. The study finds that audit quality perception and auditor selection are jointly determined. Inspection results are positively associated with audit quality perception and auditor selection. The nature of a manager-auditor affiliation is directly associated with audit quality perception and inversely related to auditor selection. Further, controlling for perception, audit committee members are more likely to recommend auditors with unfavorable inspection results, if a prior affiliation with management is present than if an affiliation is absent. Overall, the results indicate that audit committee members are diligent in evaluating auditors, and PCAOB inspection results are useful. The results of this study contribute to the audit committee effectiveness and PCAOB literature. / by Veena Looknanan-Brown. / Thesis (Ph.D.)-Florida Atlantic University, 2011. / Includes bibliography. / Electronic reproduction. Boca Raton, Fla., 2011. Mode of access: World Wide Web.

L’écart entre ce que le public attend de la part de l’auditeur et ce que ce dernier pense réaliser est connu sous le vocable d’ « expectation gap ». Cette recherche a pour ambition de contribuer à la compréhension de ce phénomène. Nous appréhendons l’ « expectation gap » dans ses dimensions discursive et normative. Ceci nous conduit à poser les deux questions de recherche suivantes : - Comment et pourquoi le concept d’ « expectation gap » a-t-il émergé dans le discours de la profession d’audit ? - Quel est le rôle des normes d’audit dans la réduction de l’ « expectation gap » ? Notre démarche méthodologique, qui s’inscrit dans le contexte français, comporte trois phases : une étude documentaire longitudinale, une enquête fondée sur des entretiens et l’étude du cas de la norme NEP 705 « Justification des appréciations ». Elle permet de montrer que le concept d’ « expectation gap » a été introduit en France dans les années 1990 sous l’impulsion d’institutions européennes et internationales. L’ « expectation gap » est utilisé dans les discours comme une excuse permettant aux auditeurs d’échapper aux accusations du public et de conserver leur statut et leur position sur le marché. De surcroît, les normes d’audit en France non seulement ne permettent pas de réduire l’ « expectation gap », mais jouent au contraire un rôle légitimant. / The « expectation gap » is defined as the gap between what the public expects from the auditor and what the auditor expects to achieve. The present research treats the expectation gap in its discursive and normative dimensions. It aims to contribute to the understanding of the expectation gap phenomenon by examining the following research questions: How and why the concept of «expectation gap» has emerged in the discourse of the audit profession? And what is the role of auditing standards in the reduction of the expectation gap? We address these questions within the French context using a methodological approach that consists of three phases: a longitudinal documentary study, a survey based on interviews, and a case study of the standard NEP 705 «Justification of assessments». We find that the concept of «expectation gap» was introduced in France in the 1990s under the influence of European and international institutions. We also find that the expectation gap is used in discourses as an excuse allowing auditors to escape public accusations and maintain their status and position in the market. Finally, we find that auditing standards in France not only don’t reduce the expectation gap, but actually play a role in legitimizing it.

Business organizations disclose financial Information to a wide range of audiences through the medium of audited financial statements. Distinct classes of readers come in contact with these statements—each reader possessing varying degrees of financial expertise. Readers as "semantic reactors" develop their own expectations and interpretations of the messages management and the auditor are attempting to convey. In the process, many readers look upon the auditor's report as a "symbol" or seal of approval. The purposes of this study were to assess the role that communication theory plays In the auditor's attestation, to examine the perceived communication effects of the expanded auditor's certificate versus the current auditor's certificate, and to recommend ways in which communication problems can be dealt with more effectively. It was concluded that a communication problem does exist in relation to the auditor's report, and communication theory can play a distinctive role in reducing the magnitude of this problem. The profession should continue to seek answers as to the proper role of the auditor and management in relation to audited financial statements, as well as to settle the question concerning whom the statements are intended to serve.

New and revised Canadian Auditing Standards for audits of companies with fiscal periods ending on or after December 15, 2018 came into effect in April 2017. This paper examines the economic effects of one of the updates: the new auditor reporting requirement to disclose the auditor’s responsibilities over other information. We investigate the relationship between the existence of the auditor’s commentary about the MD&A within the other information paragraph on the auditor’s report and the reactions of users of the financial statements, namely investors and analysts, to the MD&A. We find that both investors and analysts do not respond to the auditor’s commentary about the MD&A within the other information paragraph present on the auditor’s report. Our result indicates that although the disclosure may not be providing additional information value to users of the financial statements as the standard setters intended, it is also not creating an increase in the audit expectation gap.

I investigate the effects of requiring the audit engagement partner (EP) signature and individual EP’s quality on information asymmetry, analysts’ forecast errors and forecast dispersion. I predict and find that, ceteris paribus, there is a significant decline in information asymmetry, analysts’ forecast errors and forecast dispersion from the pre- to post-EP signature period in the UK over both of short-term (e.g., 2008-2010) and long-term (e.g., 2004-2014). These findings hold when using a control sample approach and a different proxy for the information asymmetry, which indicate that my results are not likely due to the effect of concurrent events and correlated omitted variables. These findings provide timely and important empirical evidence to the ongoing debate about whether the Public Company Accounting Oversight Board should pass a similar requirement in the U.S. / Includes bibliography. / Dissertation (Ph.D.)--Florida Atlantic University, 2016. / FAU Electronic Theses and Dissertations Collection

Using tax accrual quality as a proxy for audit quality, I investigate whether companies that significantly decreased APTS surrounding the effective date of the Public Company Accounting Oversight Board’s 2006 Rules on Ethics, Independence, and Tax Services experienced an improvement in audit quality after the change. Given the specific target of the PCAOB 2006 restrictions is companies aggressively avoiding taxes with the assistance of APTS, I also investigate whether companies associated with tax aggressive services are also more likely to experience an improvement in audit quality following the reductions in APTS. Results suggest an increase in audit quality due to a reduction in economic bonding following APTS restrictions. Consistent with the economic bonding theory, companies that significantly reduced APTS experienced a larger improvement in audit quality after the change compared to companies that did not significantly reduce APTS. For tax aggressive companies, those that reduced APTS did experience a significant increase in audit quality after the change compared to tax aggressive companies that did not significantly reduce APTS. Moreover, companies considered important tax clients by their audit firms that significantly reduced APTS did experience a marginally greater increase in audit quality after the change compared to other important tax clients that did not significantly reduce APTS. Overall, my results indicate that the PCOAB 2006 restrictions were effective in decreasing APTS and economic bonding, thereby leading to improved audit quality, especially among companies associated with tax aggressive services. Accordingly, concerns for loss of knowledge spillover seem to be minimal. There are few studies that investigate the effectiveness of the PCAOB 2006 restrictions on audit quality. Therefore, my study fills this void by using a tax specific measure of audit quality, tax accrual quality, to specifically examine the target of the restrictions— audit clients that are associated with aggressive tax services. My study confirms and expands APTS, economic bonding, audit quality, tax accrual quality, and tax aggressive research, and also provides insight into and support for current policy debates concerning APTS and tax aggressive services. / Includes bibliography. / Dissertation (Ph.D.)--Florida Atlantic University, 2017. / FAU Electronic Theses and Dissertations Collection

Submitted in fulfilment of the requirements of the Master of Accounting degree, Faculty of Accounting and Informatics, Durban University of Technology, Durban, South Africa, 2016. / Financial accountability, financial control and financial reporting are the three main elements that determine the performance of the municipality. An analysis had to be made on each of these elements to find any limitations and gaps that negatively impact on the performance of the organisation. The aim of the study was to evaluate financial accountability, financial control and financial reporting of Umtshezi Municipality. The study was a census study and it was quantitative, descriptive and cross sectional in nature. The target population comprised of 45 employees from the finance department which was divided into five units, namely, Supply Chain Management, Expenditure, Asset/Fleet, Revenue and Budget. The IBM Statistical Package for Social Sciences (SPSS) version 22.0 was used to determine statistical results. The findings of the study discovered that officials lack educational qualifications and adequate understanding of the MFMA. The respondents also indicated that there was political influence affecting administration within the municipality. The study recommended that the municipality should provide funds to train employees. National Treasury should conduct consistent reviews on the implementation of the MFMA. The Department of Cooperative Governance and Traditional Affairs (COGTA) should intervene to protect the administration from political threats. / M

I show that auditors experience cognitive dissonance when they fail to take appropriate professionally skeptical (hereafter PS) action in line with high PS judgment I specifically show that cognitive dissonance leads auditors to revise their attitudes on low ranking audit actions upward and lower their risk assessments, consequently, lower overall professional skepticism I also find that auditor cognitive dissonance leads to exaggerated ex-post auditor self-assessments professional skepticism Professional skepticism is fundamental to performing an audit according to auditing standards and critical to audit quality Extant research that investigates treatments to enhance professional skepticism predominantly treats both skeptical judgment and skeptical action as analogous outcomes of professional skepticism If, however, there is a breakdown between PS judgment and PS action, the overall benefits of these treatments will be trivial I show that cognitive dissonance due to the incongruence between PS judgments and PS actions leads to an unforeseeable corollary of lower overall professional skepticism I also demonstrate a specific mechanism of how auditor incentives lead to lower professional skepticism, hence, lower audit quality Both researchers and practitioners can benefit from this study by better understating the intricacies in the critical link between PS judgment and action Additionally, I provide an empirical investigation of the components in Nelson’s (2009) model of professional skepticism and extend the model to reflect the intricacies between PS judgment and PS action I test my hypotheses via a three-group research design with attitude change as a proxy measure of cognitive dissonance / Includes bibliography / Dissertation (PhD)--Florida Atlantic University, 2016 / FAU Electronic Theses and Dissertations Collection

Fair Value Accounting is becoming increasingly more prominent, and auditing such measurements is at times difficult as a great deal of estimates and judgments are involved. This makes auditors jobs more challenging. Research has found that there is a need for understanding how auditing standards affect the audit process. Furthermore, some studies have shown that there is a gap between auditors and inspectors view of what constitutes sufficient and appropriate audit evidence regarding fair value measurements, the “FVM gap”. The aim of this study is to provide new insight on how auditing standards and inspectors affect the judgment of auditors in regards to fair value measurements. This study contributes to audit standard setters by illuminating how current auditing standards affect auditor judgment when auditing fair value measurements. It also contributes knowledge on how inspections affect judgment in the auditing process. Finally, it provides insight to practitioners on how box-checking and similar tools affect auditor judgment. We performed semi-structured interviews with respondents who have considerable experience of fair value measurements. The empirical data was thematically analysed and related to theories on judgment and decision-making as well as structure versus judgment research. A number of interesting findings were made; auditing standards seem to be well adjusted to auditors’ needs, documentation is one of the major issues when dealing with fair value measurements and the toughness of inspections between countries seem to differ. Some potential topics for future research were identified: whether or not a gap of interpretations exists between auditors and the lawyers of inspecting entities, and what effects such a gap could have; if the documentation of both audit clients and auditors needs to be improved upon. More potential areas for future research can be found in the Conclusion.