Audit and Nonaudit Fees from Different Reporting Regimes and Perceived Audit Quality

Indian Journal of Economics and Business, Forthcoming

30 Pages Posted: 19 Jan 2012 Last revised: 9 Feb 2012

See all articles by Mohinder Parkash

Mohinder Parkash

Oakland University

Rajeev Singhal

Oakland University

Yun Ellen Zhu

Oakland University

Date Written: January 19, 2012

Abstract

Auditor independence in fact as well as in appearance has been one of the concerns of the Securities and Exchange Commission. The debate on perceived audit quality is concentrated on short reporting periods. In this paper we study the issue of auditor independence by analyzing how investors and financial analysts perceive audit quality in the presence of auditor provided nonaudit services under different reporting regimes. We analyze the issue by focusing on three distinct disclosure periods. The first period of our analysis covers the relatively noncontroversial accounting disclosures made between 1978 and 1980. The second period of our analysis includes accounting scandals and perceived audit failures over February 2001 and July 2002. Our third period of analysis includes restrictions on provisions of certain nonaudit services and other audit related radical reforms with the enactment of the Sarbanes-Oxley Act in July 2002.

Suggested Citation

Parkash, Mohinder and Singhal, Rajeev and Zhu, Yun Ellen, Audit and Nonaudit Fees from Different Reporting Regimes and Perceived Audit Quality (January 19, 2012). Indian Journal of Economics and Business, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1988520

Mohinder Parkash

Oakland University ( email )

Rochester, MI 48309-4401
United States

Rajeev Singhal

Oakland University ( email )

Rochester, MI 48309-4401
United States

Yun Ellen Zhu (Contact Author)

Oakland University ( email )

419 Elliott Hall
Rochester, MI 48309-4401
United States

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