Understanding Assurance in the Australian Self-Managed Superannuation Fund Industry

38 Pages Posted: 29 May 2014

See all articles by Bruce Robert Arnold

Bruce Robert Arnold

University of Technology Sydney (UTS) - Faculty of Business; UNSW Australia Business School, School of Banking and Finance; Australian Prudential Regulation Authority

Hazel Bateman

UNSW Sydney, CEPAR

Andrew Ferguson

Department of Accounting, UTS

Adrian Raftery

Deakin Business School

Date Written: March 1, 2014

Abstract

Using proprietary data, this study examines auditor industry specialisation, professional brand effects and non-audit services (NAS) in the self-managed superannuation fund (SMSF) sector, the fastest growing and largest segment of the Australian $1.75 trillion retirement savings industry. We consider the impact of industry leadership for a large sample of SMSF audits for the three years to June 2010. After controlling for factors known to determine audit fees, we find evidence of fee discounting for the leading suppliers of SMSF audits, consistent with Simunic (1980)’s assertion of competition in the small audit client market. When considering the impact of professional affiliations, we find that registered company auditors and members of professional bodies who comply with auditing and ethical standards receive a fee premium. In terms of auditor independence, the supply of NAS is shown to improve the auditors’ ability to report breaches, suggesting no independence concerns arising from joint supply of audit and NAS in this setting.

Keywords: pension funds, audit fees, industry specialisation, professional affiliations, auditor independence, non-audit services

Suggested Citation

Arnold, Bruce Robert and Bateman, Hazel and Ferguson, Andrew and Raftery, Adrian, Understanding Assurance in the Australian Self-Managed Superannuation Fund Industry (March 1, 2014). CIFR Paper No. 001/2014. Available at SSRN: https://ssrn.com/abstract=2427566 or http://dx.doi.org/10.2139/ssrn.2427566

Bruce Robert Arnold

University of Technology Sydney (UTS) - Faculty of Business ( email )

Australia

UNSW Australia Business School, School of Banking and Finance ( email )

Sydney, NSW 2052
Australia

Australian Prudential Regulation Authority ( email )

400 George Street
Sydney, NSW 2000
Australia

Hazel Bateman

UNSW Sydney, CEPAR ( email )

High Street
Sydney, NSW 2052
Australia

Andrew Ferguson (Contact Author)

Department of Accounting, UTS ( email )

PO Box 123 Broadway
Sydney, NSW 2007
Australia
61 2 9514 3565 (Phone)

Adrian Raftery

Deakin Business School ( email )

221 Burwood Highway
Burwood, Victoria 3125
Australia
+61-3-92446643 (Phone)

HOME PAGE: http://www.deakin.edu.au/profiles/adrian-raftery

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