Audit fees, non-audit fees and auditor going-concern reporting decisions in the United Kingdom

The accounting profession has come under increased scrutiny over recent years about the growing number of non-audit fees received from audit clients and the possible negative impact of such fees on auditor independence. The argument advanced is that providing substantial amounts of non-audit services to clients may make it more likely that auditors concede to the wishes of the client management when difficult judgments are made. Such concerns are particularly salient in the case of reporting decisions related to going-concern uncertainties for financially stressed clients. This study empirically examines audit reports provided to financially stressed companies in the United Kingdom and the magnitude of audit and non-audit service fees paid to the company’s auditors. We find that the magnitude of both audit fees and non-audit fees are significantly associated with the issuance of a going-concern modified audit opinion. In particular, financially stressed companies with high audit fees are more likely to receive a going-concern modified audit opinion, whereas companies with high non-audit fees are less likely to receive a goingconcern modified audit opinion. Additional analyses indicate that the results are generally robust across alternative model and variable specifications. Overall, evidence supports the contention that high non-audit fees have a detrimental effect on going-concern reporting judgments for financially stressed U.K. companies.

Prevalence of subclinical thyroid dysfunction and its relation to socioeconomic deprivation in the elderly:a community-based cross-sectional survey

Context: Population-based screening has been advocated for subclinical thyroid dysfunction in the elderly because the disorder is perceived to be common, and health benefits may be accrued by detection and treatment. Objective: The objective of the study was to determine the prevalence of subclinical thyroid dysfunction and unidentified overt thyroid dysfunction in an elderly population. Design, Setting, and Participants: A cross-sectional survey of a community sample of participants aged 65 yr and older registered with 20 family practices in the United Kingdom. Exclusions: Exclusions included current therapy for thyroid disease, thyroid surgery, or treatment within 12 months. Outcome Measure: Tests of thyroid function (TSH concentration and free T 4 concentration in all, with measurement of free T3 in those with low TSH) were conducted. Explanatory Variables: These included all current medical diagnoses and drug therapies, age, gender, and socioeconomic deprivation (Index of Multiple Deprivation, 2004) Analysis: Standardized prevalence rates were analyzed. Logistic regression modeling was used to determine factors associated with the presence of subclinical thyroid dysfunction Results: A total of 5960 attended for screening. Using biochemical definitions, 94.2% [95% confidence interval (CI) 93.8-94.6%] were euthyroid. Unidentified overt hyper- and hypothyroidism were uncommon (0.3, 0.4%, respectively). Subclinical hyperthyroidism and hypothyroidism were identified with similar frequency (2.1%, 95% CI 1.8-2.3%; 2.9%, 95% CI 2.6-3.1%, respectively). Subclinical thyroid dysfunction was more common in females (P < 0.001) and with increasing age (P < 0.001). After allowing for comorbidities, concurrent drug therapies, age, and gender, an association between subclinical hyperthyroidism and a composite measure of socioeconomic deprivation remained. Conclusions: Undiagnosed overt thyroid dysfunction is uncommon. The prevalence of subclinical thyroid dysfunction is 5%. We have, for the first time, identified an independent association between the prevalence of subclinical thyroid dysfunction and deprivation that cannot be explained solely by the greater burden of chronic disease and/or consequent drug therapies in the deprived population. Copyright © 2006 by The Endocrine Society.