Does the Performance of Non-Audit Services by Auditors Impair Independence? Evidence from Firms Post-Service Performance
| Autor: | Thomas Sing Chiu Lau, Yaw M. Mensah |
|---|---|
| Rok vydání: | 2009 |
| Předmět: |
Service (business)
Return on assets ComputingMilieux_THECOMPUTINGPROFESSION business.industry Corporate governance media_common.quotation_subject ComputingMilieux_LEGALASPECTSOFCOMPUTING Accounting Audit Auditor independence Payment Independence ComputingMilieux_MANAGEMENTOFCOMPUTINGANDINFORMATIONSYSTEMS Value (economics) ComputingMilieux_COMPUTERSANDSOCIETY business media_common |
| Zdroj: | SSRN Electronic Journal. |
| ISSN: | 1556-5068 |
| DOI: | 10.2139/ssrn.1392048 |
| Popis: | This study examines whether the provision of non-audit services by a firm’s own auditors provides value to the firm. We examine the future return on assets and sales growth as a function of the expenditures by the client firms on non-audit services, reasoning that if such payments are intended primarily to impair auditor independence, no association with future firm performance should be detected. Our findings show that, in fact, the payments to auditors for non-audit services are positively related to the one-period ahead sales growth. We interpret these findings as suggesting that firms do obtain value for their expenditures on non-audit services provided by their auditors. Thus, even if auditor independence is compromised by such hiring, the value obtained by the client firms for their non-audit services may justify their hiring. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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