Audit quality and executive officers' affiliations with CPA firms

• 成果类型: Article
• 署名作者: Lennox, C
• 署名单位: Hong Kong University of Science & Technology
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2003.12.002
• 发表日期: 2005
• 关键词: Financial distress; nonaudit services; ceo turnover; INDEPENDENCE; management; fees

摘要

Executives are 'affiliated' if they previously worked for their companies' audit firms. I find most affiliations (71.3%) occur when auditors become employees of audit clients ('employment affiliations'), but affiliations also arise when companies hire executives' former CPA firms ('alma mater affiliations'). Affiliated companies are significantly more likely than unaffiliated companies to receive clean audit opinions-this finding holds for both employment and alma mater affiliations. Executive turnover is significantly lower for affiliated executives than for unaffiliated executives following the issuance of clean audit opinions-this suggests companies perceive affiliations are more valuable after they receive clean audit opinions. (c) 2004 Elsevier B.V. All rights reserved.