دانلود رایگان مقاله انگلیسی فشار مشتری و استقلال حسابرس: شواهدی از "رکود بزرگ" سال 2007-2009 - الزویر 2017

abstract

This study investigates whether auditors’ independence was compromised by client audit fee pressures during the recession of December 2007 through June 2009. We hypothesize that clients able to extract fee concessions from auditors during the recession, when audit risk increased, might also have been able to obtain more favorable audit opinions. We find that auditors are less likely to issue first-time going concern (GC) opinions to clients that exert fee pressure in 2008, but do not find this result in other years, including several years before and following the central recession year of 2008 (i.e. 2005–2007, 2009–2011). Our results suggest that the stringent economic environment of the recession may have weakened auditor independence for clients capable of exerting audit fee pressure, but this effect was restricted to 2008, the heart of the recession. We also find compensating payments (in the form of expected total fee increases or high current-year NAS fees) from fee pressure clients strengthen the negative association between fee pressure and auditors’ GC opinions.

6. Conclusion

Prior studies of auditor independence provide mixed evidence on whether independence is impaired by large audit fees and by large non–audit fees. Some studies find no association (Defond et al., 2002) or that auditor willingness to issue GC opinions is, if anything, greater for more clients paying higher fees (Geiger and Rama, 2003). Other studies find the opposite result (Blay and Geiger, 2013). Studies of the effect of client fees on auditor independence have not investigated whether the effect is mediated by changes in macro conditions such as economic recessions. This study extends prior literature by considering auditor independence with respect to fee pressure in the context of a severe macroeconomic change.

We investigate whether auditors’ independence was compromised due to client pressure during the Recession of December 2007 through June 2009, especially during the deep Recession year of 2008. Our measure of independence is the auditor’s willingness to issue first-time going concern modified opinions (GCs) to potentially distressed clients. Our proxy for client ability to exert pressure on the auditor’s GC decision is the client’s ability to exert pressure on the auditor’s fee in the same year. Controlling for client financial condition, we find that auditors are less likely to issue first-time GC opinions to clients that exert fee pressure on the auditors in 2008. We find no decrease in auditors’ propensity to issue GC decisions to clients exerting pressure in the years just before and after 2008. Thus, the reduction in auditor independence was limited to the heart of the Recession. We interpret these results as indicating that clients desirable enough to obtain fee concessions in the heart of the Recession also were able to obtain auditor concessions with regard to GC decisions. We argue that these results are most compatible with an economic bonding scenario in which auditors attempted to avoid alienating clients having strong bargaining power during the Recession.

We further investigate whether compensating payments (expected total fee increases and current NAS fees) from fee pressure clients strengthen the negative association between fee pressure and auditors’ GC opinions. Our primary finding is that clients able to exert fee pressure in 2008 are even less likely to receive a GC modified opinion in that year if they provide compensating payments (i.e. payments offsetting their reduced audit fees) in the form of expected future audit fee increases or current NAS fees.