Abstract

http://ssrn.com/abstract=457960
 


 



Are Audit and Nonaudit Services Associated with the Delayed Recognition of Bad News?


Gopal V. Krishnan


American University; American University - Kogod School of Business



Abstract:     
This study examines whether the tendency of managers to delay recognition of bad news about future cash flows is associated with the level of audit and nonaudit services provided by the incumbent auditor. The findings, based on multiple proxies to capture timely recognition of bad news, consistently suggest that economic dependence caused by audit and nonaudit services does not lead to delayed recognition of bad news. There is evidence that earnings of high-total fee clients have become more timely in reporting bad news in year 2001 relative to 2000, perhaps in response to mitigate investor concerns about auditor independence arising from fee dependence.

Note: Previously titled "Are Nonaudit Services and Auditor Tenure Associated with the Delayed Recognition of Bad News?"

Keywords: independence, audit fees, asymmetric timeliness, big 5 firms, Conservatism, economic bonding

JEL Classification: M49, M41, M44

working papers series


Not Available For Download

Date posted: October 12, 2003  

Suggested Citation

Krishnan, Gopal V., Are Audit and Nonaudit Services Associated with the Delayed Recognition of Bad News?. Available at SSRN: http://ssrn.com/abstract=457960

Contact Information

Gopal Krishnan (Contact Author)
American University ( email )
4400 Massachusetts Ave, NW
Washington, DC 20016
United States
American University - Kogod School of Business ( email )
4400 Massachusetts Avenue NW
Washington, DC 20016
United States
Feedback to SSRN


Paper statistics
Abstract Views: 854

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo2 in 0.313 seconds