Does clients' Investment-related Pressure affect Audit Risk?

Research output: Conference Papers (RGC: 31A, 31B, 32, 33)32_Refereed conference paper (no ISBN/ISSN)peer-review

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Detail(s)

Original languageEnglish
Publication statusPublished - 28 Apr 2015

Conference

Title38th Annual Congress of the European Accounting Association
LocationUniversity of Strathclyde
PlaceUnited Kingdom
CityGlasgow
Period28 - 30 April 2015

Abstract

This study examines whether auditors consider market pressure on client management as a factor contributing to audit risk. The literature suggests that when management jobs are threatened by negative market reaction to poor mergers and acquisitions investment, managers are more likely to misstate financial statements in the post-investment period due to the pressure on their job security (Bens et al., 2012). We find that firms under such investment-related pressure experience larger increases in audit fees and audit lags in the post-investment period. The findings of this paper suggest that auditors perceive market pressure on client management as a risk factor, as recommended by SAS No. 99.

Citation Format(s)

Does clients' Investment-related Pressure affect Audit Risk? / WU, HAI; YU, Yangxin.

2015. Paper presented at 38th Annual Congress of the European Accounting Association, Glasgow, United Kingdom.

Research output: Conference Papers (RGC: 31A, 31B, 32, 33)32_Refereed conference paper (no ISBN/ISSN)peer-review