The auditor-to-client revolving door and earnings management

Journal of Accounting, Auditing and Finance

Volumn 20, Issue 1, 2005, Pages 1-26

  Geiger, Marshall A ^a   North, David S ^a   O'Connell, Brendan T ^b  

^a UNIVERSITY OF RICHMOND   (United States)

^b DEAKIN UNIVERSITY   (Australia)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 33645698252     PISSN: 0148558X     EISSN: None     Source Type: Journal    
DOI: 10.1177/0148558X0502000101     Document Type: Review

References (51)

1. AICPA. 1978. "Commission on Auditors' Responsibilities" (The Cohen Report). Report, Conclusions and Recommendations. New York: American Institute of Certified Public Accountants.
2. AICPA. 1991. "Under the Rule of Conduct 102 - Integrity and Objectivity." Ethics Ruling No. 77. Journal of Accountancy (February): 111.
3. AICPA. 2002. AICPA Professional Standards. Vol. 2. Chicago, Ill: CCH.
4. Ball, R., and P. Brown. 1968. "An Empirical Evaluation of Accounting Income Numbers." Journal of Accounting Research 6 (Fall): 159-178.
5. Bartov, E., D. Givoly, and C. Hayn. 2002. "The Rewards to Meeting or Beating Earnings Expectations." Journal of Accounting and Economics 33:173-204.
6. Bartov, E., F. A. Gul, and J. S. L. Tsui. 2000. "Discretionary - Accruals Models and Audit Qualifications." Journal of Accounting and Economics 30:241-252.
7. Beasley, M. S. 1996. "An Empirical Analysis of the Relation between Board of Director Composition and Financial Statement Fraud." The Accounting Review 71 (October): 443-465.
8. Beasley, M. S., J. V. Carcello, and D. R. Hermanson. 2000. "Should You Offer Your Job to an External Auditor." The Journal of Corporate Accounting and Finance 11:35-42.
9. Beatty, A. L., B. Ke, and K. R. Petroni. 2002. "Earnings Management to Avoid Earnings Declines across Publicly and Privately Held Banks." The Accounting Review 77 (July): 547-570.
10. Beaver, W., R. Clarke, and W. Wright. 1979. "The Association between Unsystematic Security Returns and the Magnitude of Earnings Forecast Errors." Journal of Accounting Research 17 (Autumn): 316-340.
11. Becker, C. L., M. L. DeFond, J. Jiambalvo and K. R. Subramanyam. 1998. "The Effect of Audit Quality on Earnings Management." Contemporary Accounting Research 15 (Spring): 1-24.
12. Brown, L. 2001. "A Temporal Analysis of Earnings Surprises: Profits vs. Losses." Journal of Accounting Research 39 (Spring): 221-241.
13. Carcello, J. V., and T. L. Neal. 2000. "Audit Committee Composition and Auditor Reporting." Accounting Review 75 (October): 453-467.
14. Clikeman, P. 1998. "Auditor Independence: Continuing Controversy." Ohio CPA Journal 57:40-43.
15. Collingwood, H. 2001. "The Earnings Game: Everyone Plays, Nobody Wins." Harvard Business Review (June): 65-74.
16. Dechow, P. M., and D. J. Skinner. 2000. "Earnings Management: Reconciling the Views of Accounting Academics, Practitioners, and Regulators." Accounting Horizons 14 (June): 235-250.
17. Dechow, P. M., R. G. Sloan, and A. P. Sweeney. 1995. "Detecting Earnings Management." The Accounting Review 70 (April): 193-225.
18. Dechow, P., R. Sloan, and A. Sweeney. 1996. "Causes and Consequences of Earnings Manipulation: An Analysis of Firms Subject to Enforcement Actions by the SEC." Contemporary Account Research 13 (Spring): 1-36.
19. DeFond, M. L., and Park, C. W. 2001. "The Reversal of Abnormal Accruals and the Market Valuation of Earnings Surprises." The Accounting Review 76 (July): 375-404.
20. DeGeorge, F., J. Patel, and R. Zeckhauser. 1999. "Earnings Management to Exceed Thresholds." The Journal of Business 72 (January): 1-33.
21. Erickson, M., and Wang, S. 1999. "Earnings Management by Acquiring Firms in Stock for Stock Mergers." Journal of Accounting and Economics 27:149-176.
22. Firth, M. 1981. "Auditor-Client Relationships and Their Impact on Bankers' Perceived Lending Decisions." Accounting and Business Research 11 (Summer): 179-188.
23. Francis, J. R., E. L. Maydew, and H. C. Sparks. 1999. "The Role of Big 6 Auditors in the Credible Reporting of Accruals." Auditing: A Journal of Practice & Theory 18 (Fall): 17-34.
24. Frankel, R. M., M. F. Johnson, and K. K. Nelson. 2002. "The Relation between Auditors' Fees for Nonaudit Services and Earnings Management." The Accounting Review 77 (Supplement): 71-105.
25. Givoly, D., and C. Hayn. 2000. "The Changing Time-Series Properties of Earnings, Cashflows and Accruals: Has Financial Reporting Become More Conservative?" Journal of Accounting and Economics 29:287-320.
26. Healy, P. M. 1985. "The Effect of Bonus Schemes on Accounting Decisions." Journal of Accounting and Economics 7:85-107.
27. Healy, P. M., and J. M. Wahlen. 1999. "A Review of the Earnings Management Literature and Its Implications for Standard Setting." Accounting Horizons 13 (December): 365-383.
28. Imhoff, E. A. 1978. "Employment Effects on Auditor Independence." The Accounting Review 53 (October): 869-881.
29. Imhoff, E. A. 2003. "Accounting Quality, Auditing and Corporate Governance." Accounting Horizons 17 (Supplement): 117-128.
30. ISB. 2000. Independence Standard No. 3. Employment with Audit Clients. New York: Independence Standards Board.
31. Jones, J. 1991. Earnings management during import relief investigations. Journal of Accounting Research 29:193-228.
32. Jubak, J. 2002. "Companies whose boards need a scare." MSN Money Markets Personal Finance. Editor at http://www.thestreet.com/funds/jubak/ 10015517.html, April 3, 2002.
33. Kaplan, S. E., and S. M. Whitecotton. 2001. "An Examination of Auditor's Reporting Intentions When Another Auditor Is Offered Client Employment." Auditing: A Journal of Practice & Theory 20 (March): 45-63.
34. Klein, A. 2002. "Audit Committee, Board of Director Characteristics, and Earnings Management." Journal of Accounting and Economics 29:85-113.
35. Koh, H. C., and P. Mahathevan. 1993. "The Effects of Client Employment on Auditor Independence." British Accounting Review 25:227-242.
36. Levitt, A. 1998. "The Numbers Game." Speech given at NYU Center for Law and Business, New York, September 28.
37. Matsumoto, D. A. 2002. "Management's Incentives to Avoid Negative Earnings Surprises." The Accounting Review 77 (July): 483-514.
38. Moehrle, S. R. 2002. "Do Firms Use Restructuring Charge Reversals to Meet Earnings Targets?" The Accounting Review 77 (April): 397-414.
39. Parlin, C. J., and R. W. Bartlett. 1994. "Prior Employment Effects and Independence in Fact." Business and Professional Ethics Journal 13:185-202.
40. Pitt, H. L. 2002. Written testimony before the Senate Committee on Banking, Housing and Urban Affairs. March 21.
41. Reynolds, J. K., and J. R. Francis. 2000. "Does Size Matter? The Influence of Large Clients on Office-Level Auditor Reporting Decisions." Journal of Accounting and Economics 30:357-400.
42. Richardson, S., S. H. Teoh, and P. Wysocki. 1999. "Tracking Analysts' Forecasts over the Annual Earnings Horizon: Are Analysts' Forecasts Optimistic or Pessimistic?" Working paper, University of Michigan.
43. Schipper, K. 1989. "Commentary on Earnings Management." Accounting Horizons 3 (December): 91-102.
44. Schleifer, I. F., and R. A. Shockley. 1990. "Policies to Promote Auditor Independence: More Evidence on the Perception Gap." Journal of Applied Business Research 2:10-17.
45. Securities and Exchange Commission (SEC), Office of the Chief Accountant. 2003. Application of the January 2003 Rules on Auditor Independence: Frequently Asked Questions. Office of the Chief Accountant. (Available at http://www.accountingweb.com/cgi-bin/item.cgi?id=97970.)
46. Teoh, S., I. Welch, and T. Wong. 1998a. "Earnings Management and the Long-Run Market Performance of Initial Public Offerings." Journal of Finance 53:1935-1974.
47. Teoh, S., I. Welch, and T. Wong. 1998b. "Earnings Management and the Long Run Underperformance of Seasoned Equity Offerings." Journal of Financial Economics 50:63-99.
48. U.S. House of Representatives. 2002. Sarbanes-Oxley Act of 2002. 107th Congress, 2nd Session.
49. U.S. Senate. 2002. Hearings before the subcommittee on telecommunications and finance of the committee on energy and commerce. February 2.
50. Warfield, T. D., J. J. Wild, and K. L. Wild. 1995. "Managerial Ownership, Accounting Choices, and Informativeness of Earnings." Journal of Accounting and Economics 20:61-92.
51. Yermack, D. 1997. "Good Timing: CEO Stock Option Awards and Company News Announcements." Journal of Finance 52:449-476.