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Conference Paper: The association between auditor independence and conservatism
Title | The association between auditor independence and conservatism |
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Authors | |
Issue Date | 2009 |
Publisher | American Accounting Association. |
Citation | The 2009 Annual Meeting of the American Accounting Association (AAA), New York, N.Y., 1-5 August 2009. How to Cite? |
Abstract | We examine the association between accounting conservatism and external auditor independence using measures of conditional, unconditional and overall conservatism. We find positive relations between auditor independence and all types of accounting conservatism. These findings suggest that greater auditor independence bolsters both long-term unconditional conservative accounting policies and conditional conservatism. Contextual analysis shows that the independence-conservatism association is stronger in Big-4 audit firms whose income from non-audit services is unexpectedly low, in clients involving high litigation risk, as well as in clients raising cash from external sources; this relation is weaker in R&D and advertising intensive firms where GAAP-induced conservatism likely reduces incentives for independent auditors to require conservative accounting treatments. |
Description | Session 7.12 - Independence |
Persistent Identifier | http://hdl.handle.net/10722/112137 |
DC Field | Value | Language |
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dc.contributor.author | Amir, E | en_HK |
dc.contributor.author | Guan, Y | en_HK |
dc.contributor.author | Livne, G | en_HK |
dc.date.accessioned | 2010-09-26T03:19:13Z | - |
dc.date.available | 2010-09-26T03:19:13Z | - |
dc.date.issued | 2009 | en_HK |
dc.identifier.citation | The 2009 Annual Meeting of the American Accounting Association (AAA), New York, N.Y., 1-5 August 2009. | - |
dc.identifier.uri | http://hdl.handle.net/10722/112137 | - |
dc.description | Session 7.12 - Independence | - |
dc.description.abstract | We examine the association between accounting conservatism and external auditor independence using measures of conditional, unconditional and overall conservatism. We find positive relations between auditor independence and all types of accounting conservatism. These findings suggest that greater auditor independence bolsters both long-term unconditional conservative accounting policies and conditional conservatism. Contextual analysis shows that the independence-conservatism association is stronger in Big-4 audit firms whose income from non-audit services is unexpectedly low, in clients involving high litigation risk, as well as in clients raising cash from external sources; this relation is weaker in R&D and advertising intensive firms where GAAP-induced conservatism likely reduces incentives for independent auditors to require conservative accounting treatments. | - |
dc.language | eng | en_HK |
dc.publisher | American Accounting Association. | - |
dc.relation.ispartof | Annual Meeting of the American Accounting Association | - |
dc.title | The association between auditor independence and conservatism | en_HK |
dc.type | Conference_Paper | en_HK |
dc.identifier.email | Amir, E: eamir@london.edu | en_HK |
dc.identifier.email | Guan, Y: ylguan@business.hku.hk | - |
dc.identifier.email | Livne, G: g.livne@city.ac.uk | - |
dc.identifier.hkuros | 162449 | en_HK |
dc.description.other | The 2009 Annual Meeting of the American Accounting Association (AAA), New York, N.Y., 1-5 August 2009. | - |