کیفیت حسابرسی در معیارهای هزینه خدمات غیر حسابرسی: شواهد از دیدگاه ضعف مادی Audit quality across non-audit service fee benchmarks: Evidence from material weakness opinions

1. Introduction Regulators worldwide continue to question whether auditorprovided non-audit services (NAS) impact audit quailty (i.e. auditor independence). Article 22 of the Directive on Statutory Audit (European Commission (EC), 2006) prohibits auditors from conducting a “statutory audit” in cases where an objective third party would conclude that the audit firm or auditor’s independence is compromised, and cites NAS as a potential threat to independence. Sikka (2009) indicates that during the financial crisis of 2008, auditors of distressed banks issued unqualified audit opinions while simultaneously collecting large amounts of NAS fees from these same clients. The EC Green Paper (2010) questioned how during the financial crisis from 2007 to 2009 numerous banks that were financially received clean audit reports for those periods.” To “further enhance audit quality,” the EC proposed a ban on all auditor provided NAS. In the United States (US), critics of auditor-provided NAS cited accounting frauds such as Enron and WorldCom as evidence that auditor-provided NAS lowers audit quality. In response, Section 201 of the Sarbanes Oxley Act of 2002 (SOX; U.S. House of Reperesentatives, 2002) banned most auditor-provided NAS and Section 202 of SOX required pre-approval of all NAS greater than 5% of total fees in the prior year. More recently, the Public Company Accounting Oversight Board (PCAOB) expressed concerns that certain tax NAS, currently allowable under SOX, are negatively impacting audit quality (Harris, 2014). In light of the continued concerns regarding the appropriateness of auditor-provided NAS, this study investigates two related research questions. First, do firms with zero NAS have higher audit quality than firms that purchase NAS from their external auditor? Sharma (2014) notes, it is unclear whether zero NAS auditproviders are more independent than auditors who provide NAS to their clients. Given the EC’s proposed ban on NAS (EC, 2010 Green Paper) and PCAOB concerns regarding tax NAS currently allowable under SOX (Harris, 2014), this question is relevant. Secondly, do firms that purchase NAS less than materiality benchmarks used in practice have higher audit quality than firms with auditor-provided NAS greater than those benchmarks? Despite the concerns expressed by regulators, the accounting profession has long maintained that NAS provide synergies with audits resulting in knowledge spillovers and efficiencies to the audit function that improve audit quality (Melancon, 2000, p. 26). Sharma (2014) suggests that future research needs to examine the “turning point” at which NAS no longer provide synergies to the audit function. An extensive literature exists on the association between auditorprovided NAS and audit quality. Typically, discretionary accruals, restatements, going concern opinions (GCO), or market based measures (e.g. earnings response coefficients) are used to proxy for audit quality. Fee ratios or total NAS fees paid to the auditor are used to proxy for economic dependence or client importance. In summary, the findings from this literature are unclear (Sharma, 2014, p. 83) and thus the typical proxies noted above are not used.