Has Sarbanes-Oxley standardized audit quality?
Purpose The purpose of this paper is to examine whether the institutional changes accompanying the passage of the Sarbanes-Oxley Act of 2002 (SOX) have standardized the audit’s role in the overall financial reporting process, thereby reducing the impact of auditor characteristics on financial report...
Gespeichert in:
| Veröffentlicht in: | American journal of business 2017-01, Vol.32 (1), p.2-23 |
|---|---|
| Hauptverfasser: | , , |
| Format: | Artikel |
| Sprache: | eng |
| Schlagworte: | |
| Online-Zugang: | Volltext |
| Tags: |
Tag hinzufügen
Keine Tags, Fügen Sie den ersten Tag hinzu!
|
| container_end_page | 23 |
|---|---|
| container_issue | 1 |
| container_start_page | 2 |
| container_title | American journal of business |
| container_volume | 32 |
| creator | Hoag, Matthew Myring, Mark Schroeder, Joe |
| description | Purpose
The purpose of this paper is to examine whether the institutional changes accompanying the passage of the Sarbanes-Oxley Act of 2002 (SOX) have standardized the audit’s role in the overall financial reporting process, thereby reducing the impact of auditor characteristics on financial reporting quality.
Design/methodology/approach
To test this hypothesis, the association between audit quality characteristics (auditor size and industry expertise) and measures of financial reporting quality (analyst earning forecast dispersion and accuracy) are estimated using regression analysis. Results of this analysis are compared across the pre- and post-SOX periods.
Findings
The results of the study document a significant relationship between auditor size (Big N vs non-Big N) and financial reporting quality (as proxied by analyst earnings forecast properties) during the pre-SOX period but not in the post-SOX period. Auditor industry expertise is significantly associated with financial reporting quality throughout the entire sample period. Thus, financial reporting quality continues to be dependent on the degree of specialization of an audit firm in both the pre- and post-SOX periods; however, the impact of auditor size as a surrogate for quality has diminished.
Originality/value
The SOX Act of 2002 represented one of the most significant changes in the regulation of audits. This paper adds to the literature by examining the Act’s effects on financial professionals’ perception of the impact of audit firm characteristics on their client’s financial reporting quality. |
| doi_str_mv | 10.1108/AJB-05-2015-0016 |
| format | Article |
| fullrecord | <record><control><sourceid>proquest_emera</sourceid><recordid>TN_cdi_proquest_journals_1881070978</recordid><sourceformat>XML</sourceformat><sourcesystem>PC</sourcesystem><sourcerecordid>4321186903</sourcerecordid><originalsourceid>FETCH-LOGICAL-c301t-50d966aa5ea74b289d25720753713bdef52b886a57a0a7618807ad31ce4a58ab3</originalsourceid><addsrcrecordid>eNp9kM9LAzEQhYMoWKt3jwue084km01yklrUKoUeVPAWZpsUtmx_Jbtg_evdUhEE8TTv8L438DF2jTBABDMcPd9xUFwAKg6AxQnroZWKKzR4-pPt-zm7SGkJoGxuix4bTChlLxRLWofEZx912GepobWn6KvP4DNqfdVku5bqqtnfXrKzBdUpXH3fPnt7uH8dT_h09vg0Hk35XAI2XIG3RUGkAum8FMZ6obQAraRGWfqwUKI0piClCUgXaAxo8hLnISdlqJR9dnPc3cbNrg2pcctNG9fdSycxFwaVkOK_VjeJoMFq07Xg2JrHTUoxLNw2ViuKe4fgDu5c586Bcgd37uCuQ4ZHJKxCpNr_RfyyLb8AWb1sng</addsrcrecordid><sourcetype>Aggregation Database</sourcetype><iscdi>true</iscdi><recordtype>article</recordtype><pqid>1881070978</pqid></control><display><type>article</type><title>Has Sarbanes-Oxley standardized audit quality?</title><source>Emerald Journals</source><source>Standard: Emerald eJournal Premier Collection</source><creator>Hoag, Matthew ; Myring, Mark ; Schroeder, Joe</creator><creatorcontrib>Hoag, Matthew ; Myring, Mark ; Schroeder, Joe</creatorcontrib><description>Purpose
The purpose of this paper is to examine whether the institutional changes accompanying the passage of the Sarbanes-Oxley Act of 2002 (SOX) have standardized the audit’s role in the overall financial reporting process, thereby reducing the impact of auditor characteristics on financial reporting quality.
Design/methodology/approach
To test this hypothesis, the association between audit quality characteristics (auditor size and industry expertise) and measures of financial reporting quality (analyst earning forecast dispersion and accuracy) are estimated using regression analysis. Results of this analysis are compared across the pre- and post-SOX periods.
Findings
The results of the study document a significant relationship between auditor size (Big N vs non-Big N) and financial reporting quality (as proxied by analyst earnings forecast properties) during the pre-SOX period but not in the post-SOX period. Auditor industry expertise is significantly associated with financial reporting quality throughout the entire sample period. Thus, financial reporting quality continues to be dependent on the degree of specialization of an audit firm in both the pre- and post-SOX periods; however, the impact of auditor size as a surrogate for quality has diminished.
Originality/value
The SOX Act of 2002 represented one of the most significant changes in the regulation of audits. This paper adds to the literature by examining the Act’s effects on financial professionals’ perception of the impact of audit firm characteristics on their client’s financial reporting quality.</description><identifier>ISSN: 1935-519X</identifier><identifier>EISSN: 1935-5181</identifier><identifier>DOI: 10.1108/AJB-05-2015-0016</identifier><language>eng</language><publisher>Bingley: Emerald Publishing Limited</publisher><subject>Accounting firms ; Accounting systems ; Audit committees ; Audit engagements ; Audit quality ; Auditing profession ; Auditing standards ; Auditors ; Credibility ; Earnings per share ; Financial reporting ; Financial statements ; Hypotheses ; Joint products ; Public companies ; Public Company Accounting Reform & Investor Protection Act 2002-US ; Quality ; Quality standards ; Studies</subject><ispartof>American journal of business, 2017-01, Vol.32 (1), p.2-23</ispartof><rights>Emerald Publishing Limited</rights><rights>Emerald Publishing Limited 2017</rights><rights>Emerald Publishing Limited.</rights><lds50>peer_reviewed</lds50><woscitedreferencessubscribed>false</woscitedreferencessubscribed><citedby>FETCH-LOGICAL-c301t-50d966aa5ea74b289d25720753713bdef52b886a57a0a7618807ad31ce4a58ab3</citedby><cites>FETCH-LOGICAL-c301t-50d966aa5ea74b289d25720753713bdef52b886a57a0a7618807ad31ce4a58ab3</cites></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><linktohtml>$$Uhttps://www.emerald.com/insight/content/doi/10.1108/AJB-05-2015-0016/full/html$$EHTML$$P50$$Gemerald$$H</linktohtml><link.rule.ids>314,777,781,962,11616,21676,27905,27906,52670,53225</link.rule.ids></links><search><creatorcontrib>Hoag, Matthew</creatorcontrib><creatorcontrib>Myring, Mark</creatorcontrib><creatorcontrib>Schroeder, Joe</creatorcontrib><title>Has Sarbanes-Oxley standardized audit quality?</title><title>American journal of business</title><description>Purpose
The purpose of this paper is to examine whether the institutional changes accompanying the passage of the Sarbanes-Oxley Act of 2002 (SOX) have standardized the audit’s role in the overall financial reporting process, thereby reducing the impact of auditor characteristics on financial reporting quality.
Design/methodology/approach
To test this hypothesis, the association between audit quality characteristics (auditor size and industry expertise) and measures of financial reporting quality (analyst earning forecast dispersion and accuracy) are estimated using regression analysis. Results of this analysis are compared across the pre- and post-SOX periods.
Findings
The results of the study document a significant relationship between auditor size (Big N vs non-Big N) and financial reporting quality (as proxied by analyst earnings forecast properties) during the pre-SOX period but not in the post-SOX period. Auditor industry expertise is significantly associated with financial reporting quality throughout the entire sample period. Thus, financial reporting quality continues to be dependent on the degree of specialization of an audit firm in both the pre- and post-SOX periods; however, the impact of auditor size as a surrogate for quality has diminished.
Originality/value
The SOX Act of 2002 represented one of the most significant changes in the regulation of audits. This paper adds to the literature by examining the Act’s effects on financial professionals’ perception of the impact of audit firm characteristics on their client’s financial reporting quality.</description><subject>Accounting firms</subject><subject>Accounting systems</subject><subject>Audit committees</subject><subject>Audit engagements</subject><subject>Audit quality</subject><subject>Auditing profession</subject><subject>Auditing standards</subject><subject>Auditors</subject><subject>Credibility</subject><subject>Earnings per share</subject><subject>Financial reporting</subject><subject>Financial statements</subject><subject>Hypotheses</subject><subject>Joint products</subject><subject>Public companies</subject><subject>Public Company Accounting Reform & Investor Protection Act 2002-US</subject><subject>Quality</subject><subject>Quality standards</subject><subject>Studies</subject><issn>1935-519X</issn><issn>1935-5181</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2017</creationdate><recordtype>article</recordtype><sourceid>AFKRA</sourceid><sourceid>AZQEC</sourceid><sourceid>BENPR</sourceid><sourceid>CCPQU</sourceid><sourceid>DWQXO</sourceid><sourceid>GNUQQ</sourceid><recordid>eNp9kM9LAzEQhYMoWKt3jwue084km01yklrUKoUeVPAWZpsUtmx_Jbtg_evdUhEE8TTv8L438DF2jTBABDMcPd9xUFwAKg6AxQnroZWKKzR4-pPt-zm7SGkJoGxuix4bTChlLxRLWofEZx912GepobWn6KvP4DNqfdVku5bqqtnfXrKzBdUpXH3fPnt7uH8dT_h09vg0Hk35XAI2XIG3RUGkAum8FMZ6obQAraRGWfqwUKI0piClCUgXaAxo8hLnISdlqJR9dnPc3cbNrg2pcctNG9fdSycxFwaVkOK_VjeJoMFq07Xg2JrHTUoxLNw2ViuKe4fgDu5c586Bcgd37uCuQ4ZHJKxCpNr_RfyyLb8AWb1sng</recordid><startdate>20170101</startdate><enddate>20170101</enddate><creator>Hoag, Matthew</creator><creator>Myring, Mark</creator><creator>Schroeder, Joe</creator><general>Emerald Publishing Limited</general><general>Emerald Group Publishing Limited</general><scope>AAYXX</scope><scope>CITATION</scope><scope>0U~</scope><scope>1-H</scope><scope>7WY</scope><scope>7WZ</scope><scope>7XB</scope><scope>8AO</scope><scope>8FI</scope><scope>AFKRA</scope><scope>AZQEC</scope><scope>BENPR</scope><scope>BEZIV</scope><scope>CCPQU</scope><scope>DWQXO</scope><scope>FYUFA</scope><scope>F~G</scope><scope>GNUQQ</scope><scope>K6~</scope><scope>K8~</scope><scope>L.-</scope><scope>L.0</scope><scope>M0C</scope><scope>M2M</scope><scope>PQBIZ</scope><scope>PQEST</scope><scope>PQQKQ</scope><scope>PQUKI</scope><scope>PSYQQ</scope><scope>PYYUZ</scope><scope>Q9U</scope><scope>S0X</scope><scope>PRINS</scope></search><sort><creationdate>20170101</creationdate><title>Has Sarbanes-Oxley standardized audit quality?</title><author>Hoag, Matthew ; Myring, Mark ; Schroeder, Joe</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c301t-50d966aa5ea74b289d25720753713bdef52b886a57a0a7618807ad31ce4a58ab3</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2017</creationdate><topic>Accounting firms</topic><topic>Accounting systems</topic><topic>Audit committees</topic><topic>Audit engagements</topic><topic>Audit quality</topic><topic>Auditing profession</topic><topic>Auditing standards</topic><topic>Auditors</topic><topic>Credibility</topic><topic>Earnings per share</topic><topic>Financial reporting</topic><topic>Financial statements</topic><topic>Hypotheses</topic><topic>Joint products</topic><topic>Public companies</topic><topic>Public Company Accounting Reform & Investor Protection Act 2002-US</topic><topic>Quality</topic><topic>Quality standards</topic><topic>Studies</topic><toplevel>peer_reviewed</toplevel><toplevel>online_resources</toplevel><creatorcontrib>Hoag, Matthew</creatorcontrib><creatorcontrib>Myring, Mark</creatorcontrib><creatorcontrib>Schroeder, Joe</creatorcontrib><collection>CrossRef</collection><collection>Global News & ABI/Inform Professional</collection><collection>Trade PRO</collection><collection>ABI/INFORM Collection</collection><collection>ABI/INFORM Global (PDF only)</collection><collection>ProQuest Central (purchase pre-March 2016)</collection><collection>ProQuest Pharma Collection</collection><collection>Hospital Premium Collection</collection><collection>ProQuest Central UK/Ireland</collection><collection>ProQuest Central Essentials</collection><collection>ProQuest Central</collection><collection>Business Premium Collection</collection><collection>ProQuest One Community College</collection><collection>ProQuest Central Korea</collection><collection>Health Research Premium Collection</collection><collection>ABI/INFORM Global (Corporate)</collection><collection>ProQuest Central Student</collection><collection>ProQuest Business Collection</collection><collection>DELNET Management Collection</collection><collection>ABI/INFORM Professional Advanced</collection><collection>ABI/INFORM Professional Standard</collection><collection>ABI/INFORM Global</collection><collection>ProQuest Psychology</collection><collection>ProQuest One Business</collection><collection>ProQuest One Academic Eastern Edition (DO NOT USE)</collection><collection>ProQuest One Academic</collection><collection>ProQuest One Academic UKI Edition</collection><collection>ProQuest One Psychology</collection><collection>ABI/INFORM Collection China</collection><collection>ProQuest Central Basic</collection><collection>SIRS Editorial</collection><collection>ProQuest Central China</collection><jtitle>American journal of business</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Hoag, Matthew</au><au>Myring, Mark</au><au>Schroeder, Joe</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Has Sarbanes-Oxley standardized audit quality?</atitle><jtitle>American journal of business</jtitle><date>2017-01-01</date><risdate>2017</risdate><volume>32</volume><issue>1</issue><spage>2</spage><epage>23</epage><pages>2-23</pages><issn>1935-519X</issn><eissn>1935-5181</eissn><abstract>Purpose
The purpose of this paper is to examine whether the institutional changes accompanying the passage of the Sarbanes-Oxley Act of 2002 (SOX) have standardized the audit’s role in the overall financial reporting process, thereby reducing the impact of auditor characteristics on financial reporting quality.
Design/methodology/approach
To test this hypothesis, the association between audit quality characteristics (auditor size and industry expertise) and measures of financial reporting quality (analyst earning forecast dispersion and accuracy) are estimated using regression analysis. Results of this analysis are compared across the pre- and post-SOX periods.
Findings
The results of the study document a significant relationship between auditor size (Big N vs non-Big N) and financial reporting quality (as proxied by analyst earnings forecast properties) during the pre-SOX period but not in the post-SOX period. Auditor industry expertise is significantly associated with financial reporting quality throughout the entire sample period. Thus, financial reporting quality continues to be dependent on the degree of specialization of an audit firm in both the pre- and post-SOX periods; however, the impact of auditor size as a surrogate for quality has diminished.
Originality/value
The SOX Act of 2002 represented one of the most significant changes in the regulation of audits. This paper adds to the literature by examining the Act’s effects on financial professionals’ perception of the impact of audit firm characteristics on their client’s financial reporting quality.</abstract><cop>Bingley</cop><pub>Emerald Publishing Limited</pub><doi>10.1108/AJB-05-2015-0016</doi><tpages>22</tpages></addata></record> |
| fulltext | fulltext |
| identifier | ISSN: 1935-519X |
| ispartof | American journal of business, 2017-01, Vol.32 (1), p.2-23 |
| issn | 1935-519X 1935-5181 |
| language | eng |
| recordid | cdi_proquest_journals_1881070978 |
| source | Emerald Journals; Standard: Emerald eJournal Premier Collection |
| subjects | Accounting firms Accounting systems Audit committees Audit engagements Audit quality Auditing profession Auditing standards Auditors Credibility Earnings per share Financial reporting Financial statements Hypotheses Joint products Public companies Public Company Accounting Reform & Investor Protection Act 2002-US Quality Quality standards Studies |
| title | Has Sarbanes-Oxley standardized audit quality? |
| url | https://sfx.bib-bvb.de/sfx_tum?ctx_ver=Z39.88-2004&ctx_enc=info:ofi/enc:UTF-8&ctx_tim=2025-01-20T04%3A35%3A47IST&url_ver=Z39.88-2004&url_ctx_fmt=infofi/fmt:kev:mtx:ctx&rfr_id=info:sid/primo.exlibrisgroup.com:primo3-Article-proquest_emera&rft_val_fmt=info:ofi/fmt:kev:mtx:journal&rft.genre=article&rft.atitle=Has%20Sarbanes-Oxley%20standardized%20audit%20quality?&rft.jtitle=American%20journal%20of%20business&rft.au=Hoag,%20Matthew&rft.date=2017-01-01&rft.volume=32&rft.issue=1&rft.spage=2&rft.epage=23&rft.pages=2-23&rft.issn=1935-519X&rft.eissn=1935-5181&rft_id=info:doi/10.1108/AJB-05-2015-0016&rft_dat=%3Cproquest_emera%3E4321186903%3C/proquest_emera%3E%3Curl%3E%3C/url%3E&disable_directlink=true&sfx.directlink=off&sfx.report_link=0&rft_id=info:oai/&rft_pqid=1881070978&rft_id=info:pmid/&rfr_iscdi=true |