Language:

Voluntary Audits versus Mandatory Audits

The Accounting review, 2011-09, Vol.86 (5), p.1655-1678 [Peer Reviewed Journal]

2011 American Accounting Association ;Copyright American Accounting Association Sep 2011 ;ISSN: 0001-4826 ;EISSN: 1558-7967 ;DOI: 10.2308/accr-10098 ;CODEN: ACRVAS

Full text available

Citations Cited by

Actions
1. Add to My Research
2. Remove from My Research
3. E-mail
4. Print
5. Permalink
6. Citation
7. EasyBib
8. EndNote
9. RefWorks
10. Delicious
11. Export RIS
12. Export BibTeX

Title:
Voluntary Audits versus Mandatory Audits
Author: Lennox, Clive S. ; Pittman, Jeffrey A.
Subjects: Audit evidence ; Auditing ; Audits ; Business audits ; Business practices ; Business structures ; Closely held corporations ; Credit ; Credit ratings ; Credit risk ; Economic activity ; Fees ; Financial audits ; Financial reporting ; Financial statements ; Firm theory ; Law ; Public companies ; Studies ; Taxation ; Western Europe
Is Part Of: The Accounting review, 2011-09, Vol.86 (5), p.1655-1678
Description: Exploiting a natural experiment in which voluntary audits replace mandatory audits for U.K. private companies, we analyze whether imposing audits suppresses valuable information about the types of companies that would voluntarily choose to be audited. We control for the assurance benefits of auditing to isolate the role signaling plays by focusing on companies that are audited under both regimes. These companies experience no change in audit assurance, although they can now reveal for the first time their desire to be audited. We find that these companies attract upgrades to their credit ratings because they send a positive signal by submitting to an audit when this is no longer legally required. In contrast, companies that dispense with being audited suffer downgrades to their ratings because avoiding an audit sends a negative signal and removes its assurance value.
Publisher: Sarasota: American Accounting Association
Language: English
Identifier: ISSN: 0001-4826
EISSN: 1558-7967
DOI: 10.2308/accr-10098
CODEN: ACRVAS
Source: ProQuest Central

Back to results list


INSPIRE LIBRARY - TON DUC THANG UNIVERSITY	(84-028) 37 755 057	Feedback
19 Nguyen Huu Tho St. Dist.7, HCM	thuvien@tdtu.edu.vn	Feedback

Voluntary Audits versus Mandatory Audits

2011 American Accounting Association ;Copyright American Accounting Association Sep 2011 ;ISSN: 0001-4826 ;EISSN: 1558-7967 ;DOI: 10.2308/accr-10098 ;CODEN: ACRVAS

Searching Remote Databases, Please Wait