We found a match
Your institution may have access to this item. Find your institution then sign in to continue.
- Title
Changes in Audit Quality under Auditing Standard No. 5.
- Authors
Draeger, Michelle; Herrmann, Don; Lawson, Bradley P.
- Abstract
We examine the impact of Auditing Standard No. 5 (AS5) on audit quality. Prior research suggests a reallocation of resources toward higher-risk clients with no overall change in audit quality associated with the adoption of AS5. However, using financial restatements as our proxy for audit quality, we find the likelihood that financial statements are subsequently restated decreases in the AS5 period. These results are robust to several additional analyses. In addition to testing the occurrence of a restatement event, our results indicate that the duration of the restated period decreases during the AS5 period. Consistent with the objectives of AS5, we also find that the improvements in audit quality associated with AS5 are greater for complex firms than non-complex firms. Overall, using financial restatements as our proxy for audit quality, our results suggest that audit quality improves following the issuance of AS5.
- Subjects
AUDITING standards; FINANCIAL statements; AUDITING; RESOURCE allocation; PROXY
- Publication
Accounting & the Public Interest, 2016, Vol 16, Issue 1, p57
- ISSN
1530-9320
- Publication type
Article
- DOI
10.2308/apin-51676