We found a match
Your institution may have rights to this item. Sign in to continue.
- Title
Auditor Independence and Auditor-Provided Tax Service: Evidence from Going-Concern Audit Opinions Prior to Bankruptcy Filings.
- Authors
Robinson, Dahlia
- Abstract
This study examines whether auditors' provision of tax services impairs auditor independence by focusing on auditors' going-concern opinions among a sample of bankruptcy filing firms. The evidence from the bankruptcy setting is particularly salient given that the bankruptcy of corporations such as Enron motivated several provisions of the Sarbanes-Oxley Act (SOX) of 2002. More recently, auditors' provision of tax service to their audit clients has been the focus of new rules by the Public Company Accounting Oversight Board (PCAOB). Consistent with improved audit quality from information spillover, the study documents a significant positive correlation between the level of tax services fees and the likelihood of correctly issuing a going-concern opinion prior to the bankruptcy filing. One implication of this result is that restricting tax services by auditors of poorly performing firms may diminish the quality of auditors' reporting decisions without leading to an improvement in auditor independence.
- Subjects
AUDITORS; GOING concern (Accounting); AUDITORS' reports; PROFESSIONAL fees; BANKRUPTCY claims; PUBLIC Company Accounting Oversight Board
- Publication
Auditing: A Journal of Practice & Theory, 2008, Vol 27, Issue 2, p31
- ISSN
0278-0380
- Publication type
Article
- DOI
10.2308/aud.2008.27.2.31