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Non‐audit Services and Auditor Independence: New Zealand Evidence


  • David Hay
  • Robert Knechel
  • Vivian Li


Abstract: This paper examines evidence in New Zealand about whether auditors providing more non‐audit services are less independent. Three sets of tests are used to address the issue. The first examines whether there is a relation between non‐audit fees and audit fees, the second examines whether there is a relation between non‐audit fees and audit report qualification or modification, and the third examines whether there is a relation between non‐audit fees and stability of audit tenure. The results suggest a potential for the impairment of auditor independence in appearance when auditors provide non‐audit services but no evidence of any impact on independence of mind.

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  • David Hay & Robert Knechel & Vivian Li, 2006. "Non‐audit Services and Auditor Independence: New Zealand Evidence," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 33(5‐6), pages 715-734, June.
  • Handle: RePEc:bla:jbfnac:v:33:y:2006:i:5-6:p:715-734

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    References listed on IDEAS

    1. Rick Antle & Elizabeth A. Gordon & Ganapathi Narayanamoorthy & Ling Zhou, 2002. "The Joint Determination of Audit Fees, Non-Audit Fees, and Abnormal Accruals," Yale School of Management Working Papers ysm289, Yale School of Management.
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    2. repec:bla:acctfi:v:58:y:2018:i:3:p:885-920 is not listed on IDEAS
    3. Elizabeth Carson & Neil Fargher & Yuyu Zhang, 2016. "Trends in Auditor Reporting in Australia: A Synthesis and Opportunities for Research," Australian Accounting Review, CPA Australia, vol. 26(3), pages 226-242, September.
    4. Thomas G. Calderon, 2008. "Determinants of client-initiated and auditor-initiated auditor changes," Managerial Auditing Journal, Emerald Group Publishing, vol. 23(1), pages 4-25, January.
    5. repec:eee:jiaata:v:35:y:2019:i:c:p:18-36 is not listed on IDEAS
    6. Adel Chouaya, 2008. "Effet de l'obligation de publier les honoraires d'audit sur les honoraires des exercices ultérieurs : Le cas français," Post-Print halshs-00522481, HAL.
    7. Christopher Bleibtreu & Ulrike Stefani, 2012. "The Interdependence Between Audit Market Structure and the Quality of Financial Reporting: The Case of Non-Audit Services," Working Paper Series of the Department of Economics, University of Konstanz 2012-01, Department of Economics, University of Konstanz.
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    11. Domenico Campa & Ray Donnelly, 2016. "Non-audit services provided to audit clients, independence of mind and independence in appearance: latest evidence from large UK listed companies," Accounting and Business Research, Taylor & Francis Journals, vol. 46(4), pages 422-449, June.
    12. De Fuentes, Cristina & Porcuna, Rubén, 2016. "Main drivers of consultancy services: A meta-analytic approach," Journal of Business Research, Elsevier, vol. 69(11), pages 4775-4780.
    13. Momparler, Alexandre & Carmona, Pedro & Lassala, Carlos, 2015. "Quality of consulting services and consulting fees," Journal of Business Research, Elsevier, vol. 68(7), pages 1458-1462.
    14. Cédric Lesage & Sabine Ratzinger & Jaana Kettunen, 2012. "Struggle over joint audit: on behalf of public interest?," Post-Print hal-00935004, HAL.
    15. Paul A. Griffin & David H. Lont & Yuan Sun, 2009. "Governance regulatory changes, International Financial Reporting Standards adoption, and New Zealand audit and non‐audit fees: empirical evidence," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 49(4), pages 697-724, December.
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    17. repec:ibf:ijbfre:v:12:y:2018:i:2:p:77-94 is not listed on IDEAS

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