ANALYSIS OF THE RELATIONSHIP BETWEEN THE PERSPECTIVE OF NON-AUDIT SERVICES AND THE QUALITY OF EXTERNAL AUDIT IN BRAZILIAN LISTED COMPANIES
DOI:
https://doi.org/10.22561/cvr.v31i1.4500Keywords:
Non-audit service, Audit quality, Earnings managementAbstract
Audit firms play an important role for investors by having the ability to reduce information asymmetry between companies and users of accounting information. However, when audits provide other services to their clients, such as non-audit services (NAS), the independence and quality of the auditor's work may become dubious. In this context, the present work sought to verify the relationship between the realization of the future expectation of NAS and the quality of the audit. For this, the discretionary accruals were used, through modified Jones model and KS, to capture the earnings management, variable representative of the loss of audit quality. Through the analysis of panel data of Brazilian publicly traded companies from 2010 to 2015, the research has found significant evidence that the realization of the future expectation of providing NAS negatively impacts the quality of the audit service. This study contributes to the discussion about the subject in Brazil, little explored when compared to the national surveys. It allows regulatory agencies to obtain more rationale to base regulations on the subject, and thus ensure higher quality in the audit process, through bias free information and bias. It signals to investors on the importance of monitoring the volume and existence of NAS prospects in companies that wish to invest. In addition, it proposes a reflection on the social and ethical performance, regarding the reduction of agency costs, preponderant of the professional auditor.
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