Business, Management and Accounting
3 years ago

Audit Reforms Boost Public Trust in Financial Reporting

2 views
SSRN Electronic Journal
The Effect of Pure Audit Firms, Non-Provision of Non-Audit Services to Audit Clients, and a Fee Schedule on Audit Quality Perceptions
Nicolas Pappert, Reiner Quick

Paper Summary

The study looked at how to make financial statements' audit quality better. They tested if not offering extra services (like consulting) and having set fees could help. They did an experiment with German bankers and regular investors. The results showed that not giving extra services and having fixed fees boosted how well the audits were thought of and how independent the auditors seemed. But it didn't change how skilled the auditors were seen to be. They also found that firms that only do audits might not need to avoid giving extra services to improve audit quality.

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