Details

Autor(en) / Beteiligte

• Klein, Melissa

Titel

Study: Objectivity compromised by consulting engagements

Ist Teil von

• Accounting Today, 2001-08, Vol.15 (15), p.3-3

Ort / Verlag

New York: SourceMedia, Inc

Erscheinungsjahr

2001

Quelle

Nexis Uni

Beschreibungen/Notizen

• According to a study by the Stanford University Graduate School of Business on the effects of accounting firms' consulting business on auditor objectivity, the provision of non-audit services to audit clients impairs auditor independence and reduces the quality of earnings. The paper's findings echo concerns that have been voiced repeatedly by the SEC about increasing instances of earnings management. The study also concluded that firms with the least independent auditors are more likely to report large discretionary earnings and to just meet quarterly earnings The Stanford study examined data from the proxies of over 4,000 firms filed between February 5, when the disclosure requirement took effect, and June 15, 2001. Researchers measured the impairment of auditor independence as the ratio of non-audit fees to total fees and found a "significant negative market reaction to proxy statements filed by firms with the least independent auditors."