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Title: Regulation of auditor independence and the joint provision of audit and non-audit services in the UK 2000-2007
Author: Siddiqui, Javed
Awarding Body: University of Manchester
Current Institution: University of Manchester
Date of Award: 2007
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The thesis uses NIE and NIS perspectives to analyse the post-Enron response of the UK companies and auditors with regards to joint provision of audit and non-audit services (NAS). Three potential behaviours are investigated: NAS purchase behaviour of the UK companies; NAS disclosure behaviour of the UK companies; and responses of the auditors to draft APB ethical standards (2004a). Using the NIE-NIS framework, it is acknowledged that such responses could be driven by varying degrees of legitimacy, and economic dependence. The thesis uses multi-strategy research methods to investigate the behaviours of UK companies and auditors. Using a sample of 147 FTSE 250 companies, the thesis provides evidence of changes in NAS purchase behaviour post-Enron. Also, it is found that NAS purchase behaviour varies with varying threats of legitimacy. OLS and 2SLS regression results identify audit fees, company size, and legitimacy threat as important determinants of NAS fees in the UK. With regards to NAS disclosure behaviour, the results indicate that UK companies significantly increased NAS related disclosures in their annual reports, irrespective of varying levels of institutional pressures. Use of a disclosure index facilitates this thesis in identifying the determinants of NAS disclosures of the UK companies. Company size, governance, and registration with the SEC are found to be important determinants of disclosure levels. A qualitative analysis of the auditors' response letters to the draft APB ethical standards reveals that the responses of different groups of auditors varied with the varying threats of legitimacy. Also, it is found that the auditors' responses were driven by economic reasons. Overall, the findings of this thesis suggest that behaviour in the UK was significantly affected by the events in the US and that UK companies followed strategies both of voluntarily reducing NAS purchase and providing greater NAS disclosure to help maintain confidence in UK financial reporting and auditing. Also, the strategies adopted by auditors varied in accordance with their legitimacy threat exposure, and economic dependence. 6
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available