Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Auditor conservatism and voluntary disclosure: Evidence from the Year 2000 systems issue

Auditor conservatism and voluntary disclosure: Evidence from the Year 2000 systems issue This study further examines the phenomenon of conservative auditor behaviour by considering the level of voluntary disclosure of Year 2000 remediation information in company annual reports. Previous studies have provided evidence of conservative auditor behaviour by examining the link between Big 6 auditor choice and accruals (Francis and Krishnan 1999; Becker et al., 1998; Defond and Subramanyam 1998). Protecting their reputation capital increases Big 6 auditor incentives to act conservatively to avoid litigation risk. We propose and find that Big 6 auditor clients disclose more Year 2000 remediation information than non–Big 6 auditor clients. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Accounting & Finance Wiley

Auditor conservatism and voluntary disclosure: Evidence from the Year 2000 systems issue

Loading next page...
 
/lp/wiley/auditor-conservatism-and-voluntary-disclosure-evidence-from-the-year-NTuy5fXt0z

References (11)

Publisher
Wiley
Copyright
The Accounting Association of Australia and New Zealand, 2003
ISSN
0810-5391
eISSN
1467-629X
DOI
10.1111/1467-629X.00081
Publisher site
See Article on Publisher Site

Abstract

This study further examines the phenomenon of conservative auditor behaviour by considering the level of voluntary disclosure of Year 2000 remediation information in company annual reports. Previous studies have provided evidence of conservative auditor behaviour by examining the link between Big 6 auditor choice and accruals (Francis and Krishnan 1999; Becker et al., 1998; Defond and Subramanyam 1998). Protecting their reputation capital increases Big 6 auditor incentives to act conservatively to avoid litigation risk. We propose and find that Big 6 auditor clients disclose more Year 2000 remediation information than non–Big 6 auditor clients.

Journal

Accounting & FinanceWiley

Published: Mar 1, 2003

There are no references for this article.