Responses by Australian Auditors to the Global Financial Crisis

38 Pages Posted: 16 Mar 2013

See all articles by Yang Xu

Yang Xu

University of New South Wales (UNSW) - School of Accounting

Elizabeth Carson

University of New South Wales

Neil L. Fargher

Australian National University (ANU)

Liwei Jiang

Australian National University (ANU)

Date Written: March 2013

Abstract

We examine the impact of the global financial crisis (GFC) on auditor behaviour in Australia. Using a sample of listed companies, we examine whether the GFC impacted the propensity of auditors to issue going concern modifications and increased audit effort as reflected in audit fees and audit reporting lag. Controlling for client characteristics, we find an increase in the propensity to issue going concern opinions during the period 2008–2009 compared with the period 2005–2007 and that Big N auditors responded to the GFC earlier than non‐Big N auditors. In relation to audit effort, we find evidence of increased audit fees during the period 2008–2009 compared with the period 2005–2007. There is, however, no evidence of increased audit reporting lags during the GFC.

Keywords: Auditor behaviour, Going concern opinion, Audit effort, Audit fees, Audit reporting lag

JEL Classification: M42

Suggested Citation

Xu, Yang and Carson, Elizabeth and Fargher, Neil L. and Jiang, Liwei, Responses by Australian Auditors to the Global Financial Crisis (March 2013). Accounting & Finance, Vol. 53, Issue 1, pp. 301-338, 2013. Available at SSRN: https://ssrn.com/abstract=2234285 or http://dx.doi.org/10.1111/j.1467-629X.2011.00459.x

Yang Xu

University of New South Wales (UNSW) - School of Accounting

Room 3038 South Wing 3rd Floor
Quadrangle Building
Sydney, NSW 2052
Australia

Elizabeth Carson

University of New South Wales ( email )

Sydney, NSW 2052
Australia
+612 9385 5822 (Phone)
+612 9385 5925 (Fax)

Neil L. Fargher

Australian National University (ANU) ( email )

Canberra, Australian Capital Territory 2601
Australia

Liwei Jiang

Australian National University (ANU)

Canberra, Australian Capital Territory 2601
Australia

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