The Impact of Managerial Overconfidence and Ability on Auditor Going-Concern Decisions and Auditor Termination

Persistent Link:
http://hdl.handle.net/10150/612944
Title:
The Impact of Managerial Overconfidence and Ability on Auditor Going-Concern Decisions and Auditor Termination
Author:
Kim, Hyo Jung
Issue Date:
2016
Publisher:
The University of Arizona.
Rights:
Copyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.
Abstract:
I examine the influence of managerial overconfidence and ability on 1) auditors' decision to issue a going concern opinion and 2) auditor dismissal rates after issuing a going concern opinion. When there is substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time, auditing standards prescribe that auditors obtain and evaluate information about client management's remedy plans. I find that clients with overconfident managers are more likely to receive a going concern opinion. I also show that managerial ability mitigates the positive association between managerial overconfidence and the likelihood of a going concern opinion. Additionally, I examine how these managerial attributes influence auditor retention decisions, and find that auditors are more likely to be dismissed after issuance of a going concern opinion when the client company has overconfident management. Finally, I find that the association between managerial overconfidence and auditor dismissal is stronger when management is more powerful than the company's audit committee.
Type:
text; Electronic Dissertation
Keywords:
Management
Degree Name:
Ph.D.
Degree Level:
doctoral
Degree Program:
Graduate College; Management
Degree Grantor:
University of Arizona
Advisor:
Dhaliwal, Dan

Full metadata record

DC FieldValue Language
dc.language.isoen_USen
dc.titleThe Impact of Managerial Overconfidence and Ability on Auditor Going-Concern Decisions and Auditor Terminationen_US
dc.creatorKim, Hyo Jungen
dc.contributor.authorKim, Hyo Jungen
dc.date.issued2016-
dc.publisherThe University of Arizona.en
dc.rightsCopyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author.en
dc.description.abstractI examine the influence of managerial overconfidence and ability on 1) auditors' decision to issue a going concern opinion and 2) auditor dismissal rates after issuing a going concern opinion. When there is substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time, auditing standards prescribe that auditors obtain and evaluate information about client management's remedy plans. I find that clients with overconfident managers are more likely to receive a going concern opinion. I also show that managerial ability mitigates the positive association between managerial overconfidence and the likelihood of a going concern opinion. Additionally, I examine how these managerial attributes influence auditor retention decisions, and find that auditors are more likely to be dismissed after issuance of a going concern opinion when the client company has overconfident management. Finally, I find that the association between managerial overconfidence and auditor dismissal is stronger when management is more powerful than the company's audit committee.en
dc.typetexten
dc.typeElectronic Dissertationen
dc.subjectManagementen
thesis.degree.namePh.D.en
thesis.degree.leveldoctoralen
thesis.degree.disciplineGraduate Collegeen
thesis.degree.disciplineManagementen
thesis.degree.grantorUniversity of Arizonaen
dc.contributor.advisorDhaliwal, Danen
dc.contributor.committeememberSunder, Shyamen
dc.contributor.committeememberSunder, Jayanthien
dc.contributor.committeememberMichas, Paulen
dc.contributor.committeememberDhaliwal, Danen
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