Mr the Number

inherent Control Weaknesses and Client find Management RANDAL old* YAN ZHANG** JIAN cabbage*** NAN ZHOU**** We study canvassors client jeopardize vigilance in the premiere year of the Sarbanes-Act Oxley (SOX) 404 implementation, and find that a pecking allege exists among analyzeors strategies to sh be curtail risk resulting from internal comprise weaknesses. We first examine the relation between internal fancy weaknesses and audit fees, special opinions, and auditor resignations, respectively, and establish that these are executable strategies to manage control risk on a stand-alone basis. We as well as find that changes in audit fees and changes in modified opinions are positively associated with changes in account internal control weaknesses. When we ask these strategies simultaneously, descriptive depict suggests that a pecking graze exists among auditors client risk management strategies. Ordered logit analyses pull ahead confirm that, as clients control risk increases, auditors are probable to respond in the order of audit fee adjustments, modified opinions, and auditor resignations. Our comprehensive evidence suggests that auditors use an array of tell strategies to manage client-related control risk.

Keywords: Internal Control Weaknesses, Client Risk Management, scrutinise Fee and Audit Opinion, Auditor Resignation *siege of Syracuse University **SUNY-Binghamton ***SUNY-Binghamton and Nanyang Technological University ****HKUST and SUNY-Binghamton We thank Jean Bedard, Ayesha Dey, Denise Dickins, Weili Ge, Karla Johnstone, grade Kohlbeck, Ryan LaFond, Clive Lennox, and especially an unnamed reviewer for detaile! d and insightful suggestions that fork out importantly improved the paper. We also thank workshop participants at the 2006 HKUST pass Symposium on Accounting Research, the 2006 Annual Conference on fiscal Economics and Accounting at Georgia estate University, the 2007 American Accounting Association (AAA) Annual Meeting, the 2007 AAA Auditing Midyear Meeting, the 2007...If you neediness to get a full essay, order it on our website: OrderCustomPaper.com

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