دانلود رایگان مقاله انگلیسی تاثیر خدمات مشاوره ای بر کیفیت حسابرسی - وایلی 2018

Abstract

We use experimental markets to examine whether providing consulting services to a nonaudit client impacts audit quality. Our paper directly addresses concerns raised by the Public Company Accounting Oversight Board that the largest public accounting firms’ growth in their consulting practices threatens audit quality. We conduct an experiment proposed using a registration-based editorial process. We compare a baseline where the auditor does not provide consulting services to conditions where auditors provide consulting to audit clients or where auditors only provide consulting services to nonaudit clients. Our unique design provides evidence on whether providing consulting to nonaudit clients strengthens the salience of a client-cooperative social norm that reduces audit quality. We do not find differences in audit quality by condition in our planned analysis, however we find greater variation in audit quality in the conditions where auditors provide consulting services compared to the baseline. In unplanned analyses, our results suggest providing consulting services increases auditor cooperation with managers, increasing audit quality when managers prefer high audit quality and decreasing audit quality when managers prefer low audit quality.

Conclusion

We examine whether providing nonaudit services to nonaudit clients impairs audit quality. Recent growth in large accounting firms’ consulting practices has raised concerns that this evolving business model will lead to impairments in audit quality. We conduct an audit market experiment subject to a registration-based editorial process in which we vary the institutional rules governing nonaudit service relationships between auditors and clients in order to study the effect on auditor behavior. We introduce a cooperative consulting services task between manager and auditor participants. We predict that auditor engagement in this task will strengthen the salience of a cooperation norm with management that will carry over into the subsequent audit market and impair audit quality. Our experimental approach allows us to study this effect without independence concerns or the potential benefits of knowledge spillover. In our planned analysis we do not find that the provision of consulting services impairs audit quality uniformly; rather we find that it leads to greater variation between markets with higher high audit quality and lower low audit quality. We predicted cooperating in a consulting task would lead to greater cooperation on the audit task, and predicted cooperation to manifest itself as lower audit quality. However, in principle it could result in higher audit quality if that is what managers prefer. We find variation in manager preferences for audit quality and auditor perceptions of manager preferences. In unplanned analysis, we find half the NAS sessions result in high quality (HQ) markets, with managers most frequently hiring the highest quality auditor providing > 90% audit quality. These NAS HQ sessions have significantly higher audit quality than Baseline and the NAS non-HQ sessions. NAS non-HQ has significantly lower audit quality than Baseline. The results of our unplanned analyses, along with responses from the postexperiment questionnaire suggest that cooperating in the consulting market leads to cooperation in the audit market, with cooperation being dictated by manager preferences. In sessions where managers prefer high audit quality to add credibility to their reports, a cooperative auditor performs high-level verification. In sessions where managers prefer lower audit quality, a cooperative auditor performs more low-level verifications. Our unplanned analyses suggest cooperation on the consulting task amplifies auditor responses to managers’ preferences.