Auditor independence and non-audit services - ICAEW

pieces. While a few research-related items were identified, our review of this couldnot be fully rigorous due to the volume of material.Output from these searches was reviewed and all items that appeared to fall within ourremit were obtained from various sources. 7 Fortunately, many of the journal articleswere already in our personal collection; those that were not were obtained via theinternet, Stirling University Library or the British Lending Library.4.2 Review procedures adopted and classification of empirical studiesAll items collected were reviewed and grouped into categories. Each group of relatedstudies is presented in a separate chapter in this report. Full bibliographic referencesof all items cited appear at the end of the report.The empirical studies of NAS are presented in chapters 5 to 10. Figure 4.1 illustratesthe various topics addressed. Some studies seek merely to document the amount andnature of joint NAS provision. These descriptive studies are reviewed in chapter 5. A(relatively small) group of studies explore the determinants (antecedents) of the NASpurchase decision (chapter 6). Most studies, however, are in one way or another,seeking to uncover the consequences of joint NAS purchase: is the perception ofauditor independence reduced or enhanced; is auditor independence in fact reduced orenhanced; are there economies of scope (knowledge spillovers)?The impact of joint provision on independence perceptions is important in its ownright. However another reason why there have been many studies of this type isbecause it is so difficult to research auditor independence in fact, since this isunobservable. Perception studies are reviewed in chapter 7.Studies investigating the pricing and tenure effects of joint provision are essentiallyindirect tests of the impact on independence. These are covered in chapter 8. Attemptsto conduct more direct tests explore the link between joint provision and the auditopinion given. A closely related set of studies examines the characteristics of ‘badaudits’ to see whether joint provision was a feature. Chapter 9 covers these latter twosets of empirical study.A more recent strand of research focuses on the association between joint provisionand earnings quality (chapter 10).7 In addition to these databases, we consulted the American Accounting Association database ‘TwentyFive Years of Audit Research’, which includes all articles on audit published in eight top accountingjournals (AAA, 2001). No additional items were uncovered.26