The Effect of Non-Audit Services on Auditor Independence : A study on 11 food retail- and wholesale companies in the United Kingdom

Purpose – The purpose of this study is to investigate the effect of non-audit services on auditor independence, and the importance of non-audit services as a source of income for audit firms in the United Kingdom. Design/method/approach – This study will examine 11 companies in the food retail- and wholesale industry during 2007 - 2014. Five indicators have been used; (1) Appointed auditor and provision of non-audit services to audit clients; (2) Auditor tenure; (3) Non-audit services in relation to total services; (4) Tax-services in relation to non-audit services, (5) Big Four’s revenue. Information has been collected using the quantitative approach through annual- and transparency reports. The threshold used to measure possible independence threats (self-review-, self-interest- and familiarity threat) has been set at 18,5 %. Findings – This study concludes that the jointly provision of audit- and nonaudit services possibly causes impairment of auditor independence, and that non-audit services is an important source of income for audit firms. The findings showed that in 99 %, companies purchased non-audit services from their statutory auditor. Non-audit services in relation to total services surpassed the threshold in 78 % of all financial years. Likewise, tax-services in comparison to non-audit services exceeded the threshold in 65 % of all financial years. The Big Four’s revenue from non-audit services to audit clients in relation to total revenue is almost constantly below the threshold. However, in all financial years except from one, total revenue from non-audit services surpassed revenue from audit services by far. Contribution – The study contributes to the ongoing discussion about nonaudit services effect on auditor independence. Originality/value – This study is one of few that provide detailed information about non-audit services in the food retail- and wholesale industry. It highlights social and ethical issues with regard to agency relationships.  

School belongingness and mental health functioning across the primary-secondary transition in a mainstream sample: Multi-group cross-lagged analyses

The relationship between school belongingness and mental health functioning before and after the primary-secondary school transition has not been previously investigated in students with and without disabilities. This study used a prospective longitudinal design to test the bi-directional relationships between these constructs, by surveying 266 students with and without disabilities and their parents, 6-months before and after the transition to secondary school. Cross-lagged multi-group analyses found student perception of belongingness in the final year of primary school to contribute to change in their mental health functioning a year later. The beneficial longitudinal effects of school belongingness on subsequent mental health functioning were evident in all student subgroups; even after accounting for prior mental health scores and the cross-time stability in mental health functioning and school belongingness scores. Findings of the current study substantiate the role of school contextual influences on early adolescent mental health functioning. They highlight the importance for primary and secondary schools to assess students' school belongingness and mental health functioning and transfer these records as part of the transition process, so that appropriate scaffolds are in place to support those in need. Longer term longitudinal studies are needed to increase the understanding of the temporal sequencing between school belongingness and mental health functioning of all mainstream students.

The impact of personal background and school contextual factors on academic competence and mental health functioning across the primary-secondary school transition

Students negotiate the transition to secondary school in different ways. While some thrive on the opportunity, others are challenged. A prospective longitudinal design was used to determine the contribution of personal background and school contextual factors on academic competence (AC) and mental health functioning (MHF) of 266 students, 6-months before and after the transition to secondary school. Data from 197 typically developing students and 69 students with a disability were analysed using hierarchical linear regression modelling. Both in primary and secondary school, students with a disability and from socially disadvantaged backgrounds gained poorer scores for AC and MHF than their typically developing and more affluent counterparts. Students who attended independent and mid-range sized primary schools had the highest concurrent AC. Those from independent primary schools had the lowest MHF. The primary school organisational model significantly influenced post-transition AC scores; with students from Kindergarten--Year 7 schools reporting the lowest scores, while those from the Kindergarten--Year 12 structure without middle school having the highest scores. Attending a school which used the Kindergarten--Year 12 with middle school structure was associated with a reduction in AC scores across the transition. Personal background factors accounted for the majority of the variability in post-transition AC and MHF. The contribution of school contextual factors was relatively minor. There is a potential opportunity for schools to provide support to disadvantaged students before the transition to secondary school, as they continue to be at a disadvantage after the transition.