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| Author: | Ashbaugh, H. LaFond, R. Mayhew, B. W. |
| Title: | Do Nonaudit Services Compromise Auditor Independence? Further Evidence |
| Journal: | Accounting Review
2003 : JUL, VOL. 78:3, p. 611-640 |
| Index terms: | AUDITING AUDIT COSTS FINANCIAL REPORTING |
| Language: | eng |
| Abstract: | This paper challenges the findings of Frankel et al. (2002) (FJN). The results of the discretionary accruals tests differ from FJN's when the authors adjust discretionary current accruals for firm performance. In the earnings benchmark tests, in contrast to FJN the authors find no statistically significant association between firms meeting analyst forecasts and auditor fees. The market reaction tests also provide different results than those reported by FJN. Overall, this study indicates that FJN's results are sensitive to research design choices, and the authors find no systematic evidence supporting their claim that auditors violate their independence as a result of clients purchasing relatively more nonaudit services. |
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