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File name: SSRN-id305720. ; Size: 119K
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Do Non-Audit Services Compromise Auditor Independence? Further Evidence
Hollis Ashbaugh Skaife
University of Wisconsin, Madison - Department of Accounting and Information Systems
Ryan LaFond
BlackRock
Brian W. Mayhew
University of Wisconsin, Madison - Department of Accounting and Information Systems
February 20, 2003
Unversity of Wisconsin Working paper
Abstract:
This paper challenges the findings of Frankel, Johnson and Nelson (FJN) (2002). The results of our discretionary accruals tests differ from FJN's when we adjust discretionary current accruals for firm performance. In our earnings benchmark tests, in contrast to FJN we find no statistically significant association between firms meeting analyst forecasts and auditor fees. Our market reaction tests also provide different results than those reported by FJN. Overall, our study indicates that FJN's results are sensitive to research design choices, and we find no systematic evidence supporting their claim that auditors violate their independence as a result of clients purchasing relatively more nonaudit services.
Number of Pages in PDF File: 47
Keywords: independence, audit fees, discretionary accruals, biased financial reporting
JEL Classification: M41, M43, M49
working papers series
Download This Paper
Date posted: April 18, 2002
Suggested CitationSkaife, Hollis Ashbaugh, LaFond, Ryan and Mayhew, Brian W., Do Non-Audit Services Compromise Auditor Independence? Further Evidence (February 20, 2003). Unversity of Wisconsin Working paper. Available at SSRN: http://ssrn.com/abstract=305720 or http://dx.doi.org/10.2139/ssrn.305720
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