Restatements and the Distribution of Audit Office Resources
Prior research suggests auditor resources are quasi-fixed at the office-level: local audit offices operate as semi-autonomous units, and resources are costly to transfer across offices. The objective of this study is to document a relation created by office-level resource con...
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| Format: | Others |
| Language: | English English |
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Florida State University
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| Online Access: | http://purl.flvc.org/fsu/fd/FSU_2016SP_Nash_fsu_0071E_13210 |
| Summary: | Prior research suggests auditor resources are quasi-fixed at the office-level: local audit offices operate as semi-autonomous
units, and resources are costly to transfer across offices. The objective of this study is to document a relation created by office-level
resource constraints; the allocation of additional resources to one engagement is accompanied by a decrease in the resources allocated to
concurrent engagements. To accomplish this, I examine the effect a restatement has on auditor effort for both firms issuing restatements
and non-restating clients of the same audit office. I document increased audit fees and an improvement in audit quality for restating
clients, indicative of additional resources being allocated to high-risk engagements. For non-restating clients of offices issuing a
restatement, I document lower audit fees and an increased likelihood of misstatement. The effects for non-restating clients are strongest
in offices issuing multiple restatements and in small offices, where incrementally more resources are drawn from concurrent engagements.
This study contributes to a better understanding of auditor behavior by providing evidence changes in a single client's risk profile can
alter the distribution of office resources and affect audit quality, underscoring the importance of properly assessing and addressing
resource limitations. === A Dissertation submitted to the Department of Accounting in partial fulfillment of the requirements
for the degree of Doctor of Philosophy. === Spring Semester 2016. === March 29, 2016. === Audit Fee, Audit Production, Discretionary Accruals, Restatement === Includes bibliographical references. === J. Kenneth Reynolds, Professor Directing Dissertation; Yingmei Cheng, University Representative;
Allen Blay, Committee Member; Landon Mauler, Committee Member. |
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