| Summary: | 碩士 === 國立臺北大學 === 會計學系 === 101 === The auditor shall design and perform tests of controls to obtain sufficient appropriate audit evidence as to the operating effectiveness of relevant controls if the auditor’s assessment of risks of material misstatement at the assertion level includes an expectation that the controls are operating effectively and substantive procedures alone cannot provide sufficient appropriate audit evidence at the assertion level. During the planning stage, an assessment is made of the risk that a material misstatement (significant error or fraud) could occur in the client’s financical statements. By understanding where the risks are most significant, auditors can plan their audit to spend more time where the risks are greatest. If auditors plan to rely on the client’s internal controls, that is, the disciplines over the controls are effective; auditors may reasonably reduce the level of the related substantive tests. The auditors may reply on the effectiveness of relevant controls to reduce its audit effort and pass the cost savings on to the client. The purpose of this research is to investigate the relationship between internal control weaknesses and audit fees by empirical testing.
In this paper, samples consist of public firms listed in Taiwan Stock Exchange from 2005 to 2007. We study the repationship between internal control weakeness and audit fees by empirical research, and establishing the linear regression model.
The empirical results are similar with findings of the previous studies. The audit fees are positively associated with the independent variables, that is, firms reporting material internal control weaknesses, firms having bad news, and the frequency of internal auditor turnover. Therefore, empirical results provide evidence that firms reporting material internal contraol weaknesses may cause higher audit fees.
|
|---|
