Non-Audit Services and Auditor Independence: New Zealand Evidence

20 Pages Posted: 13 Aug 2006

See all articles by David Hay

David Hay

University of Auckland - Business School

W. Robert Knechel

University of Florida - Fisher School of Accounting

Vivian Li

University of Auckland

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Abstract

This paper examines evidence in New Zealand about whether auditors providing more non-audit services are less independent. Three sets of tests are used to address the issue. The first examines whether there is a relation between non-audit fees and audit fees, the second examines whether there is a relation between non-audit fees and audit report qualification or modification, and the third examines whether there is a relation between non-audit fees and stability of audit tenure. The results suggest a potential for the impairment of auditor independence in appearance when auditors provide non-audit services but no evidence of any impact on independence of mind.

Suggested Citation

Hay, David and Knechel, W. Robert and Li, Vivian Ying, Non-Audit Services and Auditor Independence: New Zealand Evidence. Journal of Business Finance & Accounting, Vol. 33, No. 5-6, pp. 715-734, June/July 2006, Available at SSRN: https://ssrn.com/abstract=924036 or http://dx.doi.org/10.1111/j.1468-5957.2006.00602.x

David Hay (Contact Author)

University of Auckland - Business School ( email )

12 Grafton Rd
Auckland, 1010
New Zealand

W. Robert Knechel

University of Florida - Fisher School of Accounting ( email )

Warrington College of Business
PO Box 117166
Gainesville, FL 32611-7166
United States

Vivian Ying Li

University of Auckland ( email )

Private Bag 92019
Auckland
New Zealand

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