2004 Student Research Conference:
17th Annual Student Research Conference

Business & Accountancy

The Perceptions and the Reality of How Independence and Competition Affect Audit Quality
Bobbi D. Bradley♦
Dr. Jeff Romine, Faculty Mentor

One does not have to read many articles in the popular business press to learn that the auditing profession is facing a serious credibility problem. This paper addresses the concerns the SEC and others have raised about the reduced competition in the audit market and its presumed negative effects. We examined research studies of accounting restatements, audit and non-audit fees, and industry structure to determine how the audit market has changed. The conclusion of this paper is that while audit quality has decreased, the cause is not reduced competition or a lack of independence, but rather is a result of a failure of auditing firms to keep professionalism as the number one priority. Instead, in the quest for efficiency, firms have sacrificed professionalism, and audit quality has suffered. Without credibility, the auditing profession has very little to offer the public. It is up to the auditors who take their professional obligations seriously to stop this downward spiral before it is too late.

Keywords: audit quality, independence, competition


Presentation Type: Oral Paper

Session: 13-1
Location: OP 2113
Time: 10:00

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