Research Article of Journal of Theoretical and Applied Economics
Rationale and risks of non-audit services
With changing conditions of the financial environment, relative issues of non-audit services still require further developments and researches, concerning their rationale and risks that can be admitted so far, and influences of latest regulations. Here the rationale and risks of NAS were investigated through summarizing prior studies. Some researchers believe that there is a trade-off effect between advantages and disadvantages of NAS, therefore, it can be accordingly concluded that there is at least net effect in NAS’s downsides and upsides, the rationality of NAS can be prove based on this sight. However, many latest researches tend to believe NAS has adverse impacts.
Keywords: Rationale, risks, non-audit services, advantages, disadvantages
How to cite this article:
You Yu.Rationale and risks of non-audit services. Journal of Theoretical and Applied Economics, 2017; 1:4. DOI:10.28933/JTAE-2017-10-2804
1 Abbott, L. J., Parker, S., Peters, G. F. (2011). Does mandated disclosure induce a structural change in the determinants of nonaudit service purchases? Auditing: A Journal of Practice & Theory, 30(2), 51-76.
2 Ashbaugh H, Lafond R, Mayhew B (2003) Do nonaudit services compromise auditor independence? Further evidence. Account Rev 78:611–639.
3 Beaulieu, P., Reinstein, A. (2010). Belief perseverance among accounting practitioners regarding the effect of non-audit services on auditor independence. Journal of Accounting and Public Policy, 29(4), 353-373.
4 Beck, P. J., Wu, M. G. (2006). Learning by Doing and Audit Quality. Contemporary Accounting Research, 23(1), 1-30. doi:10.1506/axu4-q7q9-3yab-4qe0
5 Brandon, D. M., Crabtree, A. D., Maher, J. J. (2004). Nonaudit fees, auditor independence, and bond ratings. Auditing: A Journal of Practice & Theory, 23(2), 89-103.
6 Chan, L., Chen, T., Janakiraman, S., Radhakrishnan, S. (2012). Reexamining the relationship between audit and nonaudit fees: Dealing with weak instruments in two-stage least squares estimation. Journal of Accounting, Auditing & Finance, 2, 299-324.
7 Dhaliwal, D. S., Gleason, C. A., Heitzman, S., Melendrez, K. D. (2008). Auditor fees and cost of debt. Journal of Accounting, Auditing & Finance, 23, 1-22.
8 Duh, R., Lee, W., Hua, C. (2007). Non-audit service and auditor independence: An examination of the Procomp effect. Rev Quant Finan Acc Review of Quantitative Finance and Accounting, 32(1), 33-59.
9 Eilifsen, A., Knivsfla˚, K. H. (2013). How increased regulatory oversight of nonaudit services affects investors’ perceptions of earnings quality. Auditing: A Journal of Practice & Theory, 32(1), 85-112.
10 Fuentes, C., Pucheta-Martínez, M. C. (2009). Auditor independence, joint determination of audit and non-audit fees and the incidence of qualified audit reports. Academia. Revista Latinoamericana De Administración, 63-92.
11 Joe, J. R., Vandervelde, S. D. (2007). Do auditor-provided nonaudit services improve audit effectiveness. Contemporary Accounting Research, 24, 467-487.
12 Kinney, W. R., Palmrose, Z., Scholz, S. (2004). Auditor independence, non-audit services, and restatements: Was the U.S. government right? Journal of Accounting Research, 42, 561-588.
13 Lee, T. H., Ali, A. M., Bien, D. (2009). Towards an Understanding of the Audit Expectation Gap. The Icfai University Journal of Audit Practice.
14 Mitra, S. (2007). Non-audit Service Fees and Auditor Independence: Empirical Evidence from the Oil and Gas Industry. Journal of Accounting, Auditing & Finance
15 Nelson, M. W. (2006). Ameliorating Conflicts of Interest in Auditing: Effects of Recent Reforms On Auditors and Their Clients. Academy of Management Review, 31(1), 30-42.
16 Parkash M., Venable, (1993), Auditee incentives for auditor independence: The case of non-audit services, The Accounting Review, 68, pp. 113-33.
17 Tang, Q., Chen, H., Lin, Z. (2011). How to Measure Country Level Financial Reporting Quality? SSRN Electronic Journal SSRN Journal. doi:10.2139/ssrn.2114810
18 Tepalagul, N., Lin, L. (2014). Auditor Independence and Audit Quality: A Literature Review. Journal of Accounting, Auditing & Finance, 30(1), 101-121.