ASSOCIATION BETWEEN INDEPENDENT AUDIT COMPANIES AND ACCOUNTING CHOICES OF BRAZILIAN LISTED COMPANIES
DOI:
https://doi.org/10.22561/cvr.v32i2.5387Keywords:
Accounting Choices, Audit, Change of Audit CompanyAbstract
The present study aims to verify the association between independent auditing companies and accounting choices. The sample consisted of 135 Brazilian listed companies in B3 from 2010 to 2017. The accounting choices regarding the measurement of investment properties, inventory measurement, depreciation rate, depreciation method, operating lease, recognition of purchases or regular sales of financial assets, classification of interest expense, classification of dividends and interest on own capital paid and dividends and interest on own capital received. These choices are selected because they are explicitly contained in the accounting standards and, therefore, are easy to identify in the financial statements. To test the association between audit firms and accounting choices, the Chi-square test was used. The results point to the association of the change of the audit firm with all the accounting choices made, except for the measurement of inventories and the classification of dividends and interest on own capital paid. Additionally, it was verified that the fact that the audit firm is a Big Four is associated with changes in practices related to the measurement of investment properties, inventory measurement and the classification of dividends and interest on own capital paid. Evidence from the study indicates that the audit can be a relevant factor for the understanding of the accounting practices adopted by the companies.
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