Investment-related pressure and audit risk

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review

5 Scopus Citations
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Author(s)

Related Research Unit(s)

Detail(s)

Original languageEnglish
Pages (from-to)137-157
Journal / PublicationAuditing: A Journal of Practice & Theory
Volume36
Issue number3
Online publishedJan 2017
Publication statusPublished - Aug 2017

Abstract

This study examines whether auditors regard market pressure on client management as 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 pressure on their job security (Bens, Goodman, and Neamtiu 2012). We find that firms under such investment-related pressure experience larger increases in audit fees and audit lags in the post-investment period. Our findings suggest that auditors perceive market pressure on client management as a risk factor, as recommended by Statement on Auditing Standards (SAS) No. 99.

Research Area(s)

  • Audit fee, Audit lag, Audit risk, Investment-related pressure

Bibliographic Note

Full text of this publication does not contain sufficient affiliation information. With consent from the author(s) concerned, the Research Unit(s) information for this record is based on the existing academic department affiliation of the author(s).

Citation Format(s)

Investment-related pressure and audit risk. / Lu, Louise Yi; Wu, Hai; Yu, Yangxin.

In: Auditing: A Journal of Practice & Theory, Vol. 36, No. 3, 08.2017, p. 137-157.

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalpeer-review