Audit fees and auditor size: further evidence

Article Abstract:

The relationship between audit fees and auditor size are considered. Three hypotheses are investigated: that the Big Eight auditing firms charge more because of their monopolistic powers, that they charge more because they offer higher quality services, and, that they charge less because of economies of scale. Questionnaires returned from 361 companies, representing 12 industries, demonstrated that the Big Eight firms charge higher audit fees. No data was available to directly test whether the higher fees were due to monopolistic practices or higher quality. However the data showed that the Big Eight firms worked more hours on each audit than other firms, suggesting more thorough work (higher quality).

Economic aspects, Accounting firms, Accounting services

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An empirical analysis of audit delay

Article Abstract:

Audit delay means the time span between a firm's fiscal year end and the date its audit report is released. This delay could adversely affect a firm's stock prices, since it is generally assumed a late audit report means bad news. Reasons for audit delays can include that the companies receive qualified opinions; are industrial versus financial firms; are not publicly traded; have fiscal year ends other than December; have poor internal control; have suboptimal computer facilities; and have heavy year-end audit work in general. There are also interrelationships among each of the reasons. For example, qualified opinions are associated with longer audit delays only among financial companies.

Finance, Prices and rates, Accounting and auditing, Securities, Securities prices, Financial statements, Internal auditing

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The effects of alternative justification memos on the judgments of audit reviewees and reviewers

Article Abstract:

The authors find that auditors' justification memos can skew auditing results and that an audit can proceed positively despite the presense of fraud.

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