Non-Audit Service Fees, Auditor Characteristics and Earnings Restatements
The objective of the study is to provide empirical evidence of the impact of non-audit services (NAS) as well as other auditor characteristics on auditor independence by testing the relationship of NAS fees to the occurrence of financial statement restatements. The authors tested whether firms that restate their financial statements have higher levels of total service fees or higher levels of NAS fees than non-restatement firms. The testing also includes an examination of the relationship between the audit firm size and the audit firm industry specialization to financial statement restatements. The study found only limited evidence to support the concept that firms with higher NAS fees are more likely to restate earnings. The study did find stronger evidence that the level of total fees paid to the audit firm is significant in the predictability of a restatement. Results demonstrate the necessity of regulations concerning NAS and conflict of interest.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Agrawal, Anup & Chadha, Sahiba, 2005. "Corporate Governance and Accounting Scandals," Journal of Law and Economics, University of Chicago Press, vol. 48(2), pages 371-406, October.
When requesting a correction, please mention this item's handle: RePEc:pet:annals:v:9:i:4:y:2009:p:321-328. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Imola Driga)
If references are entirely missing, you can add them using this form.