Audit committee characteristics and auditor dismissals following "new" going-concern reports

Accounting Review

Volumn 78, Issue 1, 2003, Pages 95-117

  Carcello, Joseph V ^a   Neal, Terry L ^b  

^a UNIVERSITY OF TENNESSEE   (United States)

^b UNIVERSITY OF KENTUCKY   (United States)

Author keywords

Audit committee characteristics; Auditor dismissals; Going concern reports

Indexed keywords

EID: 0037289529     PISSN: 00014826     EISSN: None     Source Type: Journal    
DOI: 10.2308/accr.2003.78.1.95     Document Type: Review

References (51)

1. Bamber, E. M., L. S. Bamber, and M. P. Schoderbek. 1993. Audit structure and other determinants of audit report lag: An empirical analysis. Auditing: A Journal of Practice & Theory 12 (Spring): 1-23.
2. Baysinger, B. D., and H. N. Butler. 1985. Corporate governance and the board of directors: Performance effects of changes in board composition. Journal of Law, Economics and Organization 1 (Fall): 101-124.
3. Beasley, M. S. 1996. An empirical analysis of the relation between the board of director composition and financial statement fraud. The Accounting Review 71 (October): 443-465.
4. Blue Ribbon Committee (BRC). 1999. Report and Recommendations of the Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees. New York, NY: New York Stock Exchange and National Association of Securities Dealers.
5. Braiotta, L., Jr. 1999. The Audit Committee Handbook. 3rd edition. New York, NY: Wiley.
6. Carcello, J. V., D. R. Hermanson, and H. F. Huss. 1995. Temporal changes in bankruptcy-related reporting. Auditing: A Journal of Practice & Theory 14 (Fall): 133-143.
7. _, and T. L. Neal. 2000. Audit committee composition and auditor reporting. The Accounting Review 75 (October): 453-467.
8. Chow, C. W., and S. J. Rice. 1982. Qualified audit opinions and auditor switching. The Accounting Review 57 (April): 326-335.
9. Craswell, A. T. 1988. The association between qualified opinions and auditor switches. Accounting and Business Research 19 (Winter): 23-31.
10. Dechow, P. M., R. G. Sloan, and A. P. Sweeney. 1996. Causes and consequences of earnings manipulation: An analysis of firms subject to enforcement actions by the SEC. Contemporary Accounting Research 13 (Spring): 1-36.
11. DeFond, M. L. 1992. The association between changes in client firm agency costs and auditor switching. Auditing: A Journal of Practice & Theory 11 (Spring): 16-31.
12. Fama, E. F. 1980. Agency problems and the theory of the firm. Journal of Political Economy 88 (April): 288-307.
13. _, and M. C. Jensen. 1983. Separation of ownership and control. Journal of Law & Economics 26 (June): 301-325.
14. Francis, J. R., and E. R. Wilson. 1988. Auditor changes: A joint test of theories relating to agency costs and auditor differentiation. The Accounting Review 63 (October): 663-682.
15. Geiger, M., K. Raghunandan, and D. V. Rama. 1998. Costs associated with going-concern modified audit opinions: An analysis of auditor changes, subsequent opinions, and client failures. Advances in Accounting 16: 117-139.
16. Gilson, S. C. 1990. Bankruptcy, boards, banks, and blockholders. Journal of Financial Economics 27 (October): 355-387.
17. Gujarati, D. N. 1995. Basic Econometrics. 3rd edition. New York, NY: McGraw-Hill.
18. Haskins, M. E., and D. D. Williams. 1990. A contingent model of intra-Big Eight auditor changes. Auditing: A Journal of Practice & Theory 9 (Fall): 55-74.
19. Hogan, C. E., and D. C. Jeter. 1999. Industry specialization by auditors. Auditing: A Journal of Practice & Theory 18 (Spring): 1-17.
20. Iyer, V. M. 1998. Characteristics of accounting firm alumni who benefit their former firm. Accounting Horizons 12 (March): 18-30.
21. Jensen, M. C., and W. H. Meckling. 1976. Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics 3 (October): 305-360.
22. Jones, F. L. 1996. The information content of the auditor's going concern evaluation. Journal of Accounting and Public Policy 15 (Spring): 1-27.
23. Kaplan, S. N., and D. Reishus. 1990. Outside directorships and corporate performance. Journal of Financial Economics 27 (October): 389-410.
24. Klein, A. 2002a. Audit committee, board of director characteristics and earnings management. Journal of Accounting and Economics 33 (September): 1-26.
25. _. 2002b. Economic determinants of audit committee independence. The Accounting Review 77 (April): 435-452.
26. Krishnan, J. 1994. Auditor switching and conservatism. The Accounting Review 69 (January): 200-215.
27. _, and R. G. Stephens. 1995. Evidence on opinion shopping from audit opinion conservatism. Journal of Accounting and Public Policy 14 (Fall): 179-201.
28. Leonhardt, D. 2002. Anger at executives' profits fuels support for stock curb. The New York Times on the Web (July 9). Available at: http://www.nytimes.com/2002/07/09/business/09PAY.html.
29. Levinthal, D. A., and M. Fichman. 1988. Dynamics of interorganizational attachments: Auditor-client relations. Administrative Science Quarterly 33 (September): 345-369.
30. Levitt, A. 1998a. Corporate governance: Integrity in the information age. Remarks delivered at Tulane University's Corporate Law Institute, New Orleans, LA, March 12. Available at: http://www.sec.gov/news/speech/speecharchive/1998/spch206.txt.
31. _. 1998b. "The numbers game." Remarks delivered at the NYU Center for Law and Business, New York, September 28. Available at: http://www.sec.gov/news/speech/speecharchive/1998/spch220.txt.
32. _. 2000. Renewing the covenant with investors. Remarks delivered at the NYU Center for Law and Business, New York, May 10. Available at: http://www.sec.gov/news/speech/spch370.htm.
33. _. 2002. Oversight Hearing on "Accounting and Investor Protection Issues Raised by Enron and Other Public Companies." Senate Committee on Banking, Housing, and Urban Affairs. 107th Cong., 2nd sess. 12 February. Available at: http://www.senate.gov/̃banking/02_02hrg/021202/levitt.htm.
34. McKeown, J. C., J. F. Mutchler, and W. Hopwood. 1991. Towards an explanation of auditor failure to modify the audit opinions of bankrupt companies. Auditing: A Journal of Practice & Theory 10 (Supplement): 1-13.
35. Melumad, N. D., and A. Ziv. 1997. A theoretical examination of the market reaction to auditors' qualifications. Journal of Accounting Research 35 (Autumn): 239-256.
36. Millstein, I. M. 2002. Oversight Hearing on "Accounting and Investor Protection Issues Raised by Enron and Other Public Companies." Senate Committee on Banking, Housing, and Urban Affairs. 107th Cong., 2nd sess. 27 February. Available at: http://www.senate.gov/̃banking/02_02hrg/022702/millstn.htm.
37. Mutchler, J. F. 1984. Auditors' perceptions of the going-concern opinion decision. Auditing: A Journal of Practice & Theory 3 (Spring): 17-30.
38. Pitt, H. L. 2001. How to prevent future Enrons (Commentary). The Wall Street Journal (December 11): A18 or available at: http://interactive.wsj.com/archive/retrieve, cgi?id=SB1008029427565622280.djm.
39. _. 2002a. Remarks by Chairman Harvey Pitt, U.S. Securities and Exchange Commission, at the inaugural lecture of the JD/MBA lecture series, Kellogg Graduate School of Management and Northwestern University Law School, Evanston, IL, April 4. Available at: http://www.sec.gov/news/speech/spch547.htm.
40. _. 2002b. Testimony Concerning The Corporate and Auditing Accountability, Responsibility, and Transparency Act. House of Representatives Committee on Financial Services. 107th Cong., 2nd sess. 20 March. Available at: http://financialservices.house.gov/media/pdf/032002hp.pdf.
41. PricewaterhouseCoopers. 2000. Audit Committee Effectiveness: What Works Best. 2nd edition. Altamonte Springs, FL: The Institute of Internal Auditors Research Foundation.
42. Public Oversight Board (POB). 1994. Strengthening the Professionalism of the Independent Auditor. Stamford, CT: POB.
43. Ruder, D. S. 2002. Oversight Hearing on "Accounting and Investor Protection Issues Raised by Enron and Other Public Companies." Senate Committee on Banking, Housing, and Urban Affairs. 107th Cong., 2nd sess. 12 February. Available at: http://www.senate.gov/̃banking/02_02hrg/021202/ruder.htm.
44. Schwartz, K. B., and K. Menon. 1985. Auditor switches by failing firms. The Accounting Review 60 (April): 248-261.
45. Securities and Exchange Commission (SEC). 2000. Final Rule: Revision of the Commission's Auditor Independence Requirements. Release No. 33-7919. Washington, DC: SEC. Available at: http://www.sec.gov/rules/final/33-7919.htm.
46. Smith, D. B. 1986. Auditor "subject to" opinions, disclaimers, and auditor changes. Auditing: A Journal of Practice & Theory 6 (Fall): 95-108.
47. Teslik, S. 2002. Oversight Hearing on "Accounting and Investor Protection Issues Raised by Enron and Other Public Companies." Senate Committee on Banking, Housing, and Urban Affairs. 107th Cong., 2nd sess. 20 March. Available at: http://www.senate.gov/̃banking/02_03hrg/032002/teslik.htm.
48. Turner, L. 2002. Testimony Concerning The Corporate and Auditing Accountability, Responsibility, and Transparency Act. House of Representatives Committee on Financial Services. 107th Cong., 2nd sess. 13 March. Available at: http://financialservices.house.gov/media/pdf/0313021t.pdf.
49. Vicknair, D., K. Hickman, and K. C. Carnes. 1993. A note on audit committee independence: Evidence from the NYSE on "grey" area directors. Accounting Horizons 7 (March): 53-57.
50. Williams, D. D. 1988. The potential determinants of auditor change. Journal of Business Finance & Accounting 15 (Summer): 243-261.
51. Zmijewski, M. E. 1984. Methodological issues related to the estimation of financial distress prediction models. Journal of Accounting Research 22 (Supplement): 59-82.