To read the full version of this content please select one of the options below:

Estimating the Value Added by Big 8/6/5 Auditors Using Earnings and Cash Response Coefficients

Peta Stevenson‐Clarke (Griffith Business School, Griffith University)
Allan Hodgson (Griffith Business School, Griffith University and Amsterdam Graduate Business School, University of Amsterdam)

Accounting Research Journal

ISSN: 1030-9616

Article publication date: 1 July 2005

Abstract

This paper estimates the value added by Big 8/6/5 auditors after controlling for the permanent and non‐permanent impact of earnings and cash flows using linear and nonlinear (arctan) regression models. The linear model shows significant value added for industrial firms that utilise Big 8/6/5 auditors; while an arctan model shows that large auditors value‐add by attesting to the permanence of earnings for large firms. We demonstrate that refinements to the audit research can be made by using response coefficients to filter out the different timing components inherent in earnings and cash flows.

Keywords

Citation

Stevenson‐Clarke, P. and Hodgson, A. (2005), "Estimating the Value Added by Big 8/6/5 Auditors Using Earnings and Cash Response Coefficients", Accounting Research Journal, Vol. 18 No. 1, pp. 21-33. https://doi.org/10.1108/10309610580000672

Publisher

:

Emerald Group Publishing Limited

Copyright © 2005, Emerald Group Publishing Limited