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The relationship between an independent audit and financial reporting quality
Descriptive
TitleInfo
Title
The relationship between an independent audit and financial reporting quality
SubTitle
evidence from small private commercial banks
Name
(type = personal)
NamePart
(type = family)
Chan
NamePart
(type = given)
David Y.
NamePart
(type = date)
1979-
DisplayForm
David Chan
Role
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(authority = RULIB)
author
Name
(type = personal)
NamePart
(type = family)
Kogan
NamePart
(type = given)
Alexander
DisplayForm
Alexander Kogan
Affiliation
Advisory Committee
Role
RoleTerm
(authority = RULIB)
chair
Name
(type = personal)
NamePart
(type = family)
Vasarhelyi
NamePart
(type = given)
Miklos A.
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Miklos A. Vasarhelyi
Affiliation
Advisory Committee
Role
RoleTerm
(authority = RULIB)
internal member
Name
(type = personal)
NamePart
(type = family)
Alles
NamePart
(type = given)
Michael G.
DisplayForm
Michael G. Alles
Affiliation
Advisory Committee
Role
RoleTerm
(authority = RULIB)
internal member
Name
(type = personal)
NamePart
(type = family)
Anantharaman
NamePart
(type = given)
Divya
DisplayForm
Divya Anantharaman
Affiliation
Advisory Committee
Role
RoleTerm
(authority = RULIB)
internal member
Name
(type = personal)
NamePart
(type = family)
Prosch
NamePart
(type = given)
Marilyn
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Marilyn Prosch
Affiliation
Advisory Committee
Role
RoleTerm
(authority = RULIB)
outside member
Name
(type = corporate)
NamePart
Rutgers University
Role
RoleTerm
(authority = RULIB)
degree grantor
Name
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NamePart
Graduate School - Newark
Role
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school
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Text
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theses
OriginInfo
DateCreated
(qualifier = exact)
2012
DateOther
(qualifier = exact);
(type = degree)
2012-05
CopyrightDate
(qualifier = exact)
2012
Place
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(type = code)
xx
Language
LanguageTerm
(authority = ISO639-2b);
(type = code)
eng
Abstract
(type = abstract)
The study starts by examining whether the decision to have an independent audit is systematic and endogenous. Private commercial banks with under $500 million in total assets are regulatory exempt from an independent audit requirement. However, approximately 56% of these small private commercial banks voluntarily decided to have an independent audit. Utilizing a set of machine learning algorithms, I find that the decision to have an independent audit is systematically determinable and is endogenously determined given a set of bank characteristics. I also find that bank size, profitability, growth, complexity of operations, and type of ownership may influence the decision to have an independent audit at small private commercial banks. In the main part of the study, I analyze whether an independent audit improves financial reporting quality. Financial reporting quality is quantitatively measured by material accuracy, conservative recognition of probable losses, and the magnitude of discretionary accruals. Based on these quantitative measures, I find that having an independent audit does not improve financial reporting quality. More specifically, the results in this study indicate that independently audited small private commercial banks had a higher likelihood of having a restatement, were less conservative in recognizing probable loan losses, and had higher magnitudes of discretionary accruals. Collectively, the results in this study provide rigorous and substantial evidence that the quality of financial reporting may not increase by having an independent audit and may not support the benefits of procuring an independent audit absent regulatory requirements. Moreover, the study implicates the quality of audits being performed at small private commercial banks and perhaps suggests that the audit methodology used by external auditors has to be reconsidered.
Subject
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Topic
Management
RelatedItem
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TitleInfo
Title
Rutgers University Electronic Theses and Dissertations
Identifier
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ETD
Identifier
ETD_4060
PhysicalDescription
Form
(authority = gmd)
electronic resource
InternetMediaType
application/pdf
InternetMediaType
text/xml
Extent
viii, 104 p. : ill.
Note
(type = degree)
Ph.D.
Note
(type = bibliography)
Includes bibliographical references
Note
(type = vita)
Includes vita
Note
(type = statement of responsibility)
by David Y. Chan
Subject
(authority = ETD-LCSH)
Topic
Banks and banking--Accounting
Subject
(authority = ETD-LCSH)
Topic
Bank examination
Identifier
(type = hdl)
http://hdl.rutgers.edu/1782.1/rucore10002600001.ETD.000065012
RelatedItem
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TitleInfo
Title
Graduate School - Newark Electronic Theses and Dissertations
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rucore10002600001
Location
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(displayLabel = Rutgers, The State University of New Jersey)
NjNbRU
Identifier
(type = doi)
doi:10.7282/T3ZS2VFN
Genre
(authority = ExL-Esploro)
ETD doctoral
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Rights
RightsDeclaration
(ID = rulibRdec0006)
The author owns the copyright to this work.
RightsHolder
(type = personal)
Name
FamilyName
Chan
GivenName
David
Role
Copyright Holder
RightsEvent
Type
Permission or license
DateTime
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(qualifier = exact);
(point = start)
2012-04-30 14:59:16
AssociatedEntity
Name
David Chan
Role
Copyright holder
Affiliation
Rutgers University. Graduate School - Newark
AssociatedObject
Type
License
Name
Author Agreement License
Detail
I hereby grant to the Rutgers University Libraries and to my school the non-exclusive right to archive, reproduce and distribute my thesis or dissertation, in whole or in part, and/or my abstract, in whole or in part, in and from an electronic format, subject to the release date subsequently stipulated in this submittal form and approved by my school. I represent and stipulate that the thesis or dissertation and its abstract are my original work, that they do not infringe or violate any rights of others, and that I make these grants as the sole owner of the rights to my thesis or dissertation and its abstract. I represent that I have obtained written permissions, when necessary, from the owner(s) of each third party copyrighted matter to be included in my thesis or dissertation and will supply copies of such upon request by my school. I acknowledge that RU ETD and my school will not distribute my thesis or dissertation or its abstract if, in their reasonable judgment, they believe all such rights have not been secured. I acknowledge that I retain ownership rights to the copyright of my work. I also retain the right to use all or part of this thesis or dissertation in future works, such as articles or books.
Copyright
Status
Copyright protected
Availability
Status
Open
Reason
Permission or license
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Technical
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586752
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