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Big Four’s financial independence: relationship between the client’s fees and the big four’s revenues

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Big Four’s financial independence: relationship between the client’s fees and the big four’s revenues

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dc.contributor.advisor Marín Sánchez, María del Mar es_ES
dc.contributor.advisor Palmer Richard J. es_ES
dc.contributor.author Pereiro Torres, Zulema es_ES
dc.date.accessioned 2014-11-17T13:42:47Z
dc.date.available 2014-11-17T13:42:47Z
dc.date.created 2014-09-12
dc.date.issued 2014-11-17T13:42:47Z
dc.identifier.uri http://hdl.handle.net/10251/44292
dc.description.abstract [EN] Every time an auditing scandal has occurred, several voices pointed to the economic relationship between the auditor and the client as the main problem. For example, in the Bloomerbusinessweek of January 27th 2002 they published the article Accounting in Crisis. The article pointed out that: “In 2000, Arthur Andersen earned $25 million in audit fees from Enron, and another $27 million in consulting fees and other work. Sure, it's possible that Andersen's auditors blocked all of those connections from their minds and managed still to render an objective opinion, but even former insiders wonder how. "There were so many people in the Houston office who had their finger in the Enron pie," a former Andersen staffer says. "If they had somebody who said we can't sign this audit, that person would get fired". We can see another example, more recent, in the article First they killed all the accountants: How big banks, corporations and government made themselves unauditable (Soll, Jacob; 2014), Jacob Soll said that “What is tragically ironic in the Enron case is that certain basic Andersen audits actually worked. In 2001, well-trained, mid-level auditors made smoking-gun reports about questionable Enron transactions and false accounts. Yet, faced with the loss of $100 million in annual consulting fees, top management ignored the audits. The account was just too big to lose.” So, all the concern after any audit failure could be summarized as “The auditor independence […] was the impossible dream since auditors worked for and were paid by management” (Markham, Jerry W.; 2006). The purpose of this paper is to examine whether auditors are more likely to act independently when they are dealing with their biggest and more significant clients. Or, stated another way, is there a point at which the extent of the financial relationship between the client and the auditor threatens the actual or perceived independence of the auditor? If so, where would that point be? This paper compares the fees paid to the auditors in the biggest audit failures in the United States to the fees paid by the fifty largest U.S. companies to its auditors in 2012. More specifically, the paper compares the audit, tax, and non-audit service fees for fifty large clients as a percentage of average audit firm office revenue in 2012 against similar metrics associated with notable audit failures since 2002. It also addresses the impact of the Sarbanes-Oxley Act 2002 (SOX) on auditor independence by comparing the percentage of fees per average on office scandals pre- Sarbanes-Oxley Act with the fifty largest companies in US post- Sarbanes-Oxley Act. es_ES
dc.format.extent 28 es_ES
dc.language Inglés es_ES
dc.publisher Universitat Politècnica de València es_ES
dc.rights Reserva de todos los derechos es_ES
dc.subject Arthur Andersen es_ES
dc.subject Auditoría de cuentas es_ES
dc.subject Información financiera es_ES
dc.subject Ley Sarbanes-Oxley (SOX) es_ES
dc.subject Grandes empresas es_ES
dc.subject Estados Unidos (EEUU) es_ES
dc.subject Auditoria es_ES
dc.subject.classification ECONOMIA, SOCIOLOGIA Y POLITICA AGRARIA es_ES
dc.subject.other Licenciatura en Administración y Dirección de Empresas-Llicenciatura en Administració i Direcció d'Empreses es_ES
dc.title Big Four’s financial independence: relationship between the client’s fees and the big four’s revenues es_ES
dc.type Proyecto/Trabajo fin de carrera/grado es_ES
dc.rights.accessRights Cerrado es_ES
dc.contributor.affiliation Universitat Politècnica de València. Facultad de Administración y Dirección de Empresas - Facultat d'Administració i Direcció d'Empreses es_ES
dc.description.bibliographicCitation Pereiro Torres, Z. (2014). BIG FOUR’S FINANCIAL INDEPENDENCE: Relationship between the client’s fees and the big four’s revenues. http://hdl.handle.net/10251/44292. es_ES
dc.description.accrualMethod Archivo delegado es_ES


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