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June 20, 2018 06:37 PM

EAA PhD Forum 2018: Audit Research

These are the slides that Gilad Livne (University of Exeter) presented at the 2018 EAA PhD Forum in Milan. 

The learning objectives were as follows:

  • Discuss the concept of auditor independence; 
  • Review and critically evaluate findings from prior research; 
  • Discuss how to interpret abnormal audit fees; 
  • Discuss avenues for future auditing research in general, and using the European “landscape” in particular. 

The session provided an overview of the field of empirical auditing research. The main focus was on the topic of auditor independence. Following some “famous” corporate collapses (e.g., Enron) in which auditors have been implicated, a number of causes and remedies have been proposed. Moreover, regulatory action has been taken in an attempt to fix audit. For example, in the US the effects of the Sarbanes-Oxley Act of 2002 have drawn significant research effort. The EU followed with its own regulatory action, which also has been investigated. However, there is still a significant scope for further research. 

We reviewed prior findings and highlighted the research opportunities available to researchers that are interested in audit-related issues in the EU. With this in mind, we also reviewed several European reforms in the audit market. 

Key references

Amir, E., Kallunki, J.P. and Nilsson, H., 2014. The association between individual audit partners’ risk preferences and the composition of their client portfolios. Review of Accounting Studies, 19 (1): 103-133.

André, P., Broye, G., Pong, C., & Schatt, A. 2016. Are joint audits associated with higher audit fees? European Accounting Review, 25 (2): 245-274.

Cameran, M., Francis, J.R., Marra, A., & Pettinicchio, A. 2015. Are there adverse consequences of mandatory auditor rotation? Evidence from the Italian experience. Auditing: A Journal of Practice & Theory 34(1): 1-24.

Causholli, M., Chambers, D.J., and Payne, J.L.. 2014. Future nonaudit service fees and audit quality. Contemporary Accounting Research, 3 (3): 681-712.

DeFond, M., Raghunandan, K., and Subramanyam, K.R. 2002. Do non-audit service fees impair auditor independence? Evidence from going concern audit opinions. Journal of Accounting Research 40: 1247– 1274.

Zerni, M., Haapamäki, E., Järvinen, T. and Niemi, L. (2012). Do joint audits improve audit quality? Evidence from voluntary joint audits. European Accounting Review, 21(4): 1- 35.



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About Gilad Livne

Professor of Accounting

Professor of Accounting University of Exeter Business School, 2013 - present Senior Lecturer in Accounting and Finance Sir John Cass Business School, 2005 – 2013 Assistant Professor of Accounting London Business School, August 1996 – 2005 VISITING...

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