Abstract

http://ssrn.com/abstract=321294
 
 

References (45)



 
 

Citations (21)



 


 



Does Investor Selection of Auditors Enhance Auditor Independence?


Brian W. Mayhew


University of Wisconsin, Madison - Department of Accounting and Information Systems

Joel Pike


University of Illinois at Urbana-Champaign - Department of Accountancy

August 1, 2002


Abstract:     
This paper reports the results of experiments designed to examine whether investor selection of auditors enhances auditor independence. The experimental design enables us to explore the effect on independence of different institutional rules over who hires and fires the auditors and to directly measure independence violations. The results suggest that transferring the power to hire and fire the auditor from managers to investors significantly decreases the portion of independence violations. Additional analysis suggests that a reduction in independence violations increases the overall surplus generated in the markets examined.

Number of Pages in PDF File: 33

Keywords: auditor independence, auditor objectivity, experimental economics

JEL Classification: M40, M49, D80, G38, K22

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Date posted: October 15, 2002  

Suggested Citation

Mayhew, Brian W. and Pike, Joel, Does Investor Selection of Auditors Enhance Auditor Independence? (August 1, 2002). Available at SSRN: http://ssrn.com/abstract=321294 or http://dx.doi.org/10.2139/ssrn.321294

Contact Information

Brian W. Mayhew (Contact Author)
University of Wisconsin, Madison - Department of Accounting and Information Systems ( email )
School of Business
975 University Avenue
Madison, WI 53706
United States
608-262-2714 (Phone)
608-263-0477 (Fax)
Joel Pike
University of Illinois at Urbana-Champaign - Department of Accountancy ( email )
1206 South Sixth Street
Champaign, IL 61820
United States
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References:  45
Citations:  21

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