Provision of Non-Audit Services and Individuals' Investment Decisions: Experimental Evidence
Posted: 12 Nov 2007
We conduct an experiment to investigate whether concerns about an auditor's independence and reputation affect individuals' investment decisions. We examine whether the disclosure of audit and non-audit fees affects participants' investment decisions. We find that investment in clients of a less reputable auditor is reduced relative to that in other companies when non-audit fees exceed audit fees. Participants' investment in companies audited by a reputable auditor, however, is not affected by fee disclosures.
Keywords: Non-Audit Services, Investment Decisions, Auditor Independence, Auditor Reputation
JEL Classification: M49, G11, C91
Suggested Citation: Suggested Citation