TY - JOUR
T1 - Opportunities to improve the measurement of audit quality
T2 - A call for collaboration between the profession and academics
AU - van Raak, J.J.F.
AU - Thürheimer, Ulrike
PY - 2016/9
Y1 - 2016/9
N2 - Audit research relies on a wide range of publicly available measures to examine which factors influence the quality of financial statement audits. While research to date has to rely largely on remote proxies due to a lack of access to proprietary data, there is considerable doubt about the validity of these proxies and the inferences drawn based on these proxies. In order to provide insight into the reliability of these measures, Rajgopal, Srinivasan & Zheng (2015) investigate whether commonly used proxies for audit quality (i.e. auditor size, abnormal audit fees, accrual quality, and the propensity to meet and beat analyst targets) are associated with deficiencies reported in SEC investigations and class-action lawsuits. Such alleged deficiencies reflect how external stakeholders assess audit performance. Their study indicates that the use of such proxies is highly problematic and that the performance of these measures, with the exception of auditor size, is poor.
AB - Audit research relies on a wide range of publicly available measures to examine which factors influence the quality of financial statement audits. While research to date has to rely largely on remote proxies due to a lack of access to proprietary data, there is considerable doubt about the validity of these proxies and the inferences drawn based on these proxies. In order to provide insight into the reliability of these measures, Rajgopal, Srinivasan & Zheng (2015) investigate whether commonly used proxies for audit quality (i.e. auditor size, abnormal audit fees, accrual quality, and the propensity to meet and beat analyst targets) are associated with deficiencies reported in SEC investigations and class-action lawsuits. Such alleged deficiencies reflect how external stakeholders assess audit performance. Their study indicates that the use of such proxies is highly problematic and that the performance of these measures, with the exception of auditor size, is poor.
U2 - 10.5117/mab.90.31359
DO - 10.5117/mab.90.31359
M3 - Article
SN - 0924-6304
VL - 90
SP - 352
EP - 358
JO - Maandblad voor Accountancy en Bedrijfseconomie
JF - Maandblad voor Accountancy en Bedrijfseconomie
IS - 9
ER -