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Audit

Understanding the Role of Audit Committee Chairs in Enhancing Audit Quality

In the complex world of financial reporting, Audit Committee Chairs (ACCs) play a pivotal role in ensuring the integrity of corporate governance. What are their personal objectives and incentives that guide them in their actions to maintain and improve audit quality? The recent European Accounting Review article “Audit Committee Chairs’ Objectives and Risk Perceptions: Implications for Audit Quality” (Jürgen Ernstberger, Bernhard Pellens, André Schmidt, Thorsten Sellhorn & Katharina Weiß) shows how ACCs’ personal objectives and…
Thorsten Sellhorn
Thorsten Sellhorn
3 min read
0
629

Red flags in research as a means to overcome group think

Red flags in research as a means to overcome group think   How independent tests can help to overcome group think so as to enhance fraud detection. In his classic experiment in 1955, Solomon Asch showed that as soon as one person paints an incorrect picture, this picture is confirmed by a non-trivial number of others. In his research Asch shows four lines: the test line and lines 1, 2 and 3. Participants in his…
Jan Bouwens
Jan Bouwens
5 min read
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1279

Auditors’ Incentives and Audit Quality: Non-audit Services versus Contingent Audit Fees

This blog has been written by Lucas Mahieux about his recently accepted paper “Auditors’ Incentives and Audit Quality: Non-audit Services versus Contingent Audit Fees”.   What are the incentive effects of the provision of non-audit services (NAS) on auditors? This important policy question is of concern to regulators given the debate that has been raging for years on whether audit firms should provide NAS to audit clients. This debate is often reduced to a simple…
ARC Commitee
ARC Commitee
5 min read
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738

Going Concern Trends in Eastern Europe

Over the last decade, companies headquartered in Eastern Europe had a going concern rate of 7.2%. Both the Eastern and Southern European regions have higher rates of going concern compared to the Northern and Western regions. In fiscal year 2020, companies in Eastern Europe had an average going concern rate of 6.8%. In this analysis, Eastern European countries consist of the following: Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, and Slovakia. It is important to note, many Eastern European countries have…
Audit Analytics
Audit Analytics
3 min read
0
608

Going Concern Trends in Southern Europe

Southern European countries have some of the highest rates of going concern opinions in all of Europe. Four countries had going concern rates over 10% during fiscal year 2020. On average, Southern European countries had a going concern rate of 8.8%. In this analysis, Southern European countries consist of the following. Bulgaria Croatia Cyprus Greece Italy Malta Portugal Romania Slovenia Spain The southeastern European countries have seen a decline in going concern rates during the…
Audit Analytics
Audit Analytics
2 min read
0
551

Going Concern Trends in Western Europe

This analysis was originally posted by Audit Analytics. Public companies headquartered in Western European countries collectively reached their highest rate of going concern opinions (GCOs) during fiscal year (FY) 2019, before falling during FY2020. Western Europe is made up of eight countries: Austria, Belgium, France, Germany, Liechtenstein, Luxembourg, the Netherlands, and Switzerland. Each country saw its own unique trends for GCOs. However, most saw high rates of GCOs during FY2019. The rate of GCOs in Western…
Audit Analytics
Audit Analytics
3 min read
0
648

Going Concern Trends in Northern Europe

This analysis was originally posted by Audit Analytics. The rate of going concern opinions (GCOs) has been rising among northern European companies over the past decade. At the start of the decade, about 2% of companies headquartered in Scandinavian countries received a going concern opinion. GCOs peaked during fiscal year (FY) 2019 at nearly 6% due to the pandemic. But GCOs were still elevated during FY2020 at more than 4%. Northern European countries refer to Sweden,…
Audit Analytics
Audit Analytics
2 min read
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504

Going concern statements and the long-term survival of the firm

Jan Bouwens (Professor of Accounting University of Amsterdam & Research fellow University of Cambridge) Auditors issue a going concern opinion that typically does not extend beyond one year in advance. The idea of that opinion is to draw attention to pressing issues the management of the firm has to deal with and stakeholders have to bear in mind when dealing with the firm. An important question is whether the existing going concern statement is sufficient…
Jan Bouwens
Jan Bouwens
7 min read
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951

Who Audits Public Companies – The Netherlands 2020

This analysis was originally posted by Audit Analytics. In 2020, the Big Four continued their oligopoly across the top three indexes on the Euronext Amsterdam. However, unlike our previous analysis of 2019’s market share, EY no longer holds the highest market share alone. In addition to EY, Deloitte shares most of the Euronext Amsterdam, with both firms having 21 audits or 27.3% of the market share. In this post, we examine the auditor market share of the Euronext…
Audit Analytics
Audit Analytics
2 min read
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583

Who Audits Public Companies – United Kingdom 2020

This analysis was originally posted by Audit Analytics. This post is a part of Audit Analytics’ series on audit market concentration across select countries in Europe. Overall, the Big Four firms retained 84.3% of the market share for the major UK indices in 2020, a slight decline from the 88% market concentration seen in 2019.1 While PwC signed opinions for 27.5% of major LSE index-listed firms, the rest of the Big Four dropped to 56.8% of the market. Relative…
Audit Analytics
Audit Analytics
5 min read
0
611
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