Non-audit Services and Auditor Independence Depending on Client Performanceopen access
- Authors
- Kang, Sun Min; Hwang, In Tae; Hur, Kang Sung
- Issue Date
- Sep-2019
- Publisher
- Blackwell Publishing Ltd
- Citation
- Australian Accounting Review, v.29, no.3, pp 485 - 501
- Pages
- 17
- Journal Title
- Australian Accounting Review
- Volume
- 29
- Number
- 3
- Start Page
- 485
- End Page
- 501
- URI
- https://scholarworks.bwise.kr/cau/handle/2019.sw.cau/3180
- DOI
- 10.1111/auar.12243
- ISSN
- 1035-6908
1835-2561
- Abstract
- We posit that the effect of non-audit fees on auditor independence in Korea is based on audit client performance. Further, we suggest that an audit client with low performance has an incentive to purchase non-audit services (NAS) from an incumbent auditor to facilitate earnings management and steer accounting practices in a preferred direction. We find evidence that as non-audit fees in Korea increase, auditor independence is reduced only for low-performing audit clients. Thus, unconditional prohibition of NAS seems unnecessary. Regulators and policymakers should examine the motivation for purchasing NAS, particularly among audit clients with poor performance. © 2018 CPA Australia Ltd (CPA Australia).
- Files in This Item
-
- Appears in
Collections - College of Business & Economics > School of Business Administration > 1. Journal Articles
Items in ScholarWorks are protected by copyright, with all rights reserved, unless otherwise indicated.