Decision-making differences between big six and non-big six auditing firms: the implications for the internal audit function

Document Type

Article

Publication Date

8-1-2000

Abstract

Internal auditors have a direct interest in understanding how external audit firms make decisions that may have important implications for their own firm. Explores whether differently sized audit firms apply professional standards in a similar manner. Such uniform application should be expected given that all auditors should be guided by professional standards in making the qualification decision. The micro-economic environments facing big six and non-big six firms differ. Investigates whether big six and non-big six firms use the same information in deciding whether to issue a going concern modification. This study found that differently sized auditing firms did not apply the standards in a similar manner and did not use information available similarly. Internal audit audiences should find this lack of uniform application of interest since the internal audit function may be called in to contribute information to the decision-making process involved in selecting a new auditing firm. Also, the internal audit function may be involved in selecting acquisition targets for the firm. Should there be a suspicion of going concern problems involving a potential acquisition, the information provided in this paper should be useful to the internal audit function in evaluating the presence or lack of a going concern modification with respect to the potential acquisition's financial statements. © 2000, MCB UP Limited

Identifier

84986037656 (Scopus)

Publication Title

Managerial Auditing Journal

External Full Text Location

https://doi.org/10.1108/02686900010344502

ISSN

02686902

First Page

295

Last Page

305

Issue

6

Volume

15

This document is currently not available here.

Share

COinS