Audit firms goof more after lowering fees and providing non-audit services

Author: Michael Cohn

Michael Cohn, editor-in-chief of AccountingToday.com, wrote about new research by Erik Beardsley, assistant professor of accountancy at Mendoza College of Business.

When auditing firms, under pressure to lower their fees, push non-audit services, their clients’ financial statements tend to contain more errors, according to new research from the University of Notre Dame.

The study found increased rates of client financial misstatement among audit firms that increase their focus on providing non-audit services in the face of audit fee pressure, compared to audit firms that don’t.

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