Determinants of confidence and their effect on epistemic judgments: Implications for auditor calibration bias

Auditor decisions regarding the causes of accounting misstatements can have an audit effectiveness and efficiency. Specifically, overconfidence in one's decision can lead to an ineffective audit, whereas underconfidence in one's decision can lead to an inefficient audit. This dissertation explored the implications of providing various types of information cues to decision-makers regarding an Analytical Procedure task and investigated the relationship between different types of evidence cues (confirming, disconfirming, redundant or non-redundant) and the reduction in calibration bias. Information was collected using a laboratory experiment, from 45 accounting students participants. Research questions were analyzed using a 2 x 2 x 2 between-subject and within-subject analysis of covariance (ANCOVA). ^ Results indicated that presenting subjects with information cues dissimilar to the choice they made is an effective intervention in reducing the common overconfidence found in decision-making. In addition, other information characteristics, specifically non-redundant information can help in reducing a decision-maker's overconfidence/calibration bias for difficulty (compared to easy) decision-tasks. ^

Shareholder ratification of the auditor and audit market competition

In my dissertation, I examine factors associated with firms’ submission of auditor selection for shareholder ratification and test if shareholder ratification of auditor selection is associated with the extent of price competition in the audit market (as measured by audit fees) and audit quality (as measured by clients’ earnings management). The dissertation is motivated from the recent recommendation of the U.S. Treasury’s Advisory Committee on Auditing Profession (ACAP) regarding the submission of auditor selection for shareholder ratification votes. The ACAP suggests that this practice may improve the competition in the audit market; yet, there is no empirical evidence supporting the ACAP’s recommendation. My dissertation attempts to fill the gap in the literature on an issue of current interest to the auditing profession. I find that firm size, CEO-Chair duality, insider ownership and institutional ownership are associated with the submission of auditor selection for shareholder ratification vote. However, I do not find an association between audit committee variables and the submission of auditor selection for shareholder ratification vote. The second essay investigates the association between auditor ratification and audit fees. Audit fees are higher in firms that submit auditor selection for shareholder ratification. The finding is not consistent with the increased price competition predicted by the ACAP. The third essay of my dissertation examine whether the submission of auditor selection for shareholder ratification is associated with earnings management. I find that firms that submit auditor selection for shareholder ratification are more likely to have lower level of earnings management. Overall, the results suggest that the same factors that are associated with higher quality monitoring also may be associated with the submission of auditor selection for shareholder ratification vote. The results call into question the one-size-fits-all approach recommended by the ACAP.

Audit pricing, reporting quality, and auditor switches in the post -SOX period

The Sarbanes-Oxley Act represents an important watershed event in the history and regulation of the accounting profession. In this dissertation, I develop arguments as to why we can expect differences in auditor behavior before and after SOX and empirically test if indeed there were differences in auditor behavior before and after SOX. My dissertation consists of three essays. For the three essays, I investigate issues related to auditor independence, audit pricing, the impact of auditor changes in the post-SOX period. The motivation for the first part of my research comes from the SEC's assertions that there are differences between types of non-audit services in terms of their potential to adversely impact auditor independence. The first part of my dissertation empirically validates the SEC's assertions that auditors would be more conservative in those instances where the tax and other non-audit services fee ratios are high but not when the audit-related fee ratio is high. The second part of my study examines if auditors are less likely to "low ball" their audit fees in the period after SOX than in the period preceding SOX. Legislators, regulators, and the media have expressed concerns that auditors "low ball" the fees for initial year audits and that such low-balling can lead to reduced audit quality. I find that there is significant initial year audit fee discount in pre-SOX period and but the fee discount does not hold in post-SOX periods. The third part of my dissertation examines the association between auditor switches and auditor conservatism. I find that a large portion of Big 4 clients switch to non-Big 4 auditors and there is no significant evidence indicating that successor auditors are more conservative in the post-SOX period.

Shareholder Ratification of The Auditor and Audit Market Competition

In my dissertation, I examine factors associated with firms’ submission of auditor selection for shareholder ratification and test if shareholder ratification of auditor selection is associated with the extent of price competition in the audit market (as measured by audit fees) and audit quality (as measured by clients’ earnings management). The dissertation is motivated from the recent recommendation of the U.S. Treasury’s Advisory Committee on Auditing Profession (ACAP) regarding the submission of auditor selection for shareholder ratification votes. The ACAP suggests that this practice may improve the competition in the audit market; yet, there is no empirical evidence supporting the ACAP’s recommendation. My dissertation attempts to fill the gap in the literature on an issue of current interest to the auditing profession. I find that firm size, CEO-Chair duality, insider ownership and institutional ownership are associated with the submission of auditor selection for shareholder ratification vote. However, I do not find an association between audit committee variables and the submission of auditor selection for shareholder ratification vote. The second essay investigates the association between auditor ratification and audit fees. Audit fees are higher in firms that submit auditor selection for shareholder ratification. The finding is not consistent with the increased price competition predicted by the ACAP. The third essay of my dissertation examine whether the submission of auditor selection for shareholder ratification is associated with earnings management. I find that firms that submit auditor selection for shareholder ratification are more likely to have lower level of earnings management. Overall, the results suggest that the same factors that are associated with higher quality monitoring also may be associated with the submission of auditor selection for shareholder ratification vote. The results call into question the one-size-fits-all approach recommended by the ACAP.

The Office of the Auditor General of Canada : Government in Exile? (Working Paper 31)

How can a "servant of Parliament" be held in check if it disregards the constitutional conventions of responsible government and takes a place in its own right in the representative institutions? the paper presents a history of the modernization of the legislative audit in the federal Parliament. It considers the evolution of the powers and practices of the Office of the Auditor General, how its role has become intertwined with that of Treasury Board Secretariat, and the eclipse of the House of Commons' Standing Committee on Public Accounts. The paper is an abridged version of a paper prepared for a conference in Saskatoon in November, 2001. It is to be published in a UBC Press volume edited by David Smith, John Courtney and Duff Spafford of the Department of Political Science at the University of Saskatchewan. The Press will hold copyright. See also "Biggest Scandal in Canadian History," School of Policy Studies Working Paper Number 23.

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.  

Filhos da independência: etnografando os estudantes Bissau-guineenses do PEC-G em Fortaleza-CE e Natal-RN

Notre travail propose de comprendre l`immigration africaine contemporaine du Brésil à travers l'univers des étudiants guinéens participant au Programme Étudiants « Convênio de Graduação » (PEC-G) dans les villes de Fortaleza dans l'Etat Ceará et Natal dans l'Etat de Rio Grande do Norte, en étudiant leurs stratégies de convivialité et d'adaptation. Les étudiants étrangers sélectionnés dans ce programme font leur licence gratuitement dans les Instituts d'Enseignement Supérieur (IES). Pour accéder à ce programme ils doivent répondre à certains critères : montrer qu'ils sont en mesure de payer leurs frais au Brésil, avoir le bac ou un diplôme équivalent et maîtriser la langue portugaise lorsqu'ils sont originaires d'un pays n'appartenant pas à la Communauté de Pays de Langue Portugaise (CPLP). Les étudiants qui participent à des programmes de développement socio-économique contractés entre le Brésil et leurs pays d'origine sont prioritaires. Ces accords les contraignent à rentrer dans leurs pays d'origine et de travailler dans le domaine dans lequel ils ont été diplômés une fois les études terminées. Les étudiants, qui arrivent au Brésil porteurs de leurs identités ethniques guinéennes, entrent en contact avec la société brésilienne et acquièrent ainsi une « identité hybride ». C'est dans ce contexte que ce travail analyse le quotidien des étudiants africaines au Brésil avec un regard porté sur les étudiants de Guinée-Bissau à Fortaleza et à Natal comprendre l'expérience des étudiants qui vivent en terre étrangère. Ainsi, le lieu (Brésil) prend toute sa valeur par rapport au distant (Guinée) autrefois lié par l'histoire coloniale et aujourd'hui lié par des relations internationales ou diplomatiques. Finalement, la construction d'une « nouvelle » identité ethnique, d'une culture guinéenne au Brésil s'opère dans une célébration mobile c'est-à-dire successivement formée et transformée en relation avec les formes à travers lesquelles l'individu est représenté ou interpelé dans les systèmes culturels dans lesquels il est impliqué.

Riscos de quebra de continuidade e o papel do auditor

Mestrado em Auditoria

Ganhos em independência funcional no doente com AVC

Introdução – O Acidente Vascular Cerebral (AVC) representa a principal causa de dependência funcional da população adulta portuguesa. Conhecer os fatores que possam aumentar os ganhos em independência funcional é crucial para uma melhoria na abordagem destes doentes. Objetivo – Analisar os ganhos em independência funcional no doente que sofreu AVC considerando a diferença no Índice de Barthel entre a admissão e a alta e desde a alta até à primeira consulta. Métodos – Estudo de coorte retrospetivo, utilizando a base de dados hospitalar para doentes admitidos numa unidade de AVC entre 2010 e 2014. O Índice de Barthel (IB) na admissão, alta e primeira consulta após alta foi usado para calcular ganhos em independência funcional por dia entre a admissão e a alta (diferença entre IB na alta e na admissão dividindo pelo número de dias de internamento) e por semana entre a alta e a primeira consulta (diferença entre IB na primeira consulta e na alta dividindo pelo número de semanas entre a alta e a consulta). Com modelos de regressão linear avaliou-se a influência de fatores demográficos, clínicos e o destino após a alta nos ganhos em independência funcional por dia e por semana, obtendo-se coeficientes de regressão e respetivo intervalo de confiança a 95% (IC95%). Resultados – Nos 483 doentes estudados, a idade mediana é 76 anos, 59,0% são homens, 84,3% têm AVC isquémico e 30,6% foram para o domicílio após a alta. A independência funcional por dia aumentou nos anos mais recentes, particularmente em 2013 em que este parâmetro aumentou 1,164 pontos (com IC95%: 0,192 e 2,135; p=0,019) em comparação com 2010. Também o diagnóstico influenciou os ganhos diários em independência funcional, com LACI e PACI apresentando um aumento estatisticamente significativo de 1,372 pontos (IC95%: 0,324 e 2,421; p=0,010) e de 1,275 pontos (IC95%: 0,037 e 2,514; p=0,044), respetivamente, em comparação com POCI. Relativamente à independência funcional por semana, idades mais avançada e score elevado do IB na alta estão associados a menos ganhos por semana (p<0,001 e p=0,002). Também o destino após alta influencia os ganhos por semana, doentes encaminhados para unidades de convalescença apresentam ganhos de 1,289 pontos (IC95%: 0,661 e 1,917; p<0,001) em comparação com os doentes que foram para o domicílio. iv Conclusões – Houve melhoria na evolução funcional entre a admissão e a alta dos doentes em anos mais recentes sugerindo melhorias nas unidades de AVC. Atenção particular deve ser dada a estes doentes após a alta, particularmente nos de idade mais avançada.

STATE AUDITOR'S REPORT June 30, 2013

The Office of State Auditor audited the financial statements of the Barnwell County Circuit, Probate and Family Court Systems using agreed upon procedures. The following topics were included in the audit: violations of state laws, public defender application fee and supplementary schedule. A response is included by the county of Barnwell.

STATE AUDITOR'S REPORT June 30, 2013

The Office of State Auditor audited the financial statements of the Town of Cheraw Municipal Court using agreed upon procedures. The following topics were included in the audit: violations of state laws, adherence to fine guidelines and opinion on supplementary schedule. A response is included by the Town of Cheraw.