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Bank Audit Fees and Asset Securitization Risks

Cullen, Grant; Gasbarro, Domenico; Monroe, Gary; Shailer, Greg; Zhang, Yuyu

Description

We examine whether bank auditor effort, proxied by audit fees, is related to asset securitization risks (ASR) and whether the incremental auditor effort attributed to ASR is related to audit quality. Our sample period encompasses the Global Financial Crisis (GFC) and the introduction of FAS No. 166 and FAS No. 167, which were intended to constrain accounting for asset securitizations as sales. Using U.S. bank holding company (BHC) data from 2003 to 2013, we find significantly positive...[Show more]

dc.contributor.authorCullen, Grant
dc.contributor.authorGasbarro, Domenico
dc.contributor.authorMonroe, Gary
dc.contributor.authorShailer, Greg
dc.contributor.authorZhang, Yuyu
dc.date.accessioned2021-05-12T03:26:08Z
dc.date.available2021-05-12T03:26:08Z
dc.identifier.issn0278-0380
dc.identifier.urihttp://hdl.handle.net/1885/232683
dc.description.abstractWe examine whether bank auditor effort, proxied by audit fees, is related to asset securitization risks (ASR) and whether the incremental auditor effort attributed to ASR is related to audit quality. Our sample period encompasses the Global Financial Crisis (GFC) and the introduction of FAS No. 166 and FAS No. 167, which were intended to constrain accounting for asset securitizations as sales. Using U.S. bank holding company (BHC) data from 2003 to 2013, we find significantly positive associations between ASR and audit fees for Big N auditors but not for non-Big N auditors. Pre-GFC audit fees have a positive association with ASR, and are more significant for BHCs reporting a loss. After the implementation of FAS Nos. 166 and 167, this positive association persists, mainly driven by BHCs reporting a loss. With respect to the incremental auditor effort attributed to ASR, we find that, prior to the GFC, the incremental audit effort by Big N auditors, but not by non-Big N auditors, reduced the likelihood of subsequent restatements and constrained reported gains on securitizations.
dc.format.mimetypeapplication/pdf
dc.language.isoen_AU
dc.publisherAmerican Accounting Association
dc.rights© 2018 American Accounting Association
dc.sourceAuditing: A Journal of Practice and Theory
dc.subjectaudit fees
dc.subjectasset securitization risks
dc.subjectbank holding companies
dc.subjectfinancial crisis
dc.subjectrestatements
dc.subjectsecuritization gains
dc.titleBank Audit Fees and Asset Securitization Risks
dc.typeJournal article
local.description.notesImported from ARIES
local.identifier.citationvolume37
dc.date.issued2017
local.identifier.absfor150102 - Auditing and Accountability
local.identifier.absfor150205 - Investment and Risk Management
local.identifier.ariespublicationu4189736xPUB10
local.publisher.urlhttp://aaajournals.org/loi/ajpt
local.type.statusAccepted Version
local.contributor.affiliationCullen, Grant, Murdoch University
local.contributor.affiliationGasbarro, Domenico, Murdoch University
local.contributor.affiliationMonroe, Gary, University of New South Wales
local.contributor.affiliationShailer, Gregory, College of Business and Economics, ANU
local.contributor.affiliationZhang, Yuyu, QUT
local.bibliographicCitation.issue1
local.bibliographicCitation.startpage21
local.bibliographicCitation.lastpage48
local.identifier.doi10.2308/ajpt-51751
dc.date.updated2020-11-23T10:14:43Z
local.identifier.scopusID2-s2.0-85041714115
dcterms.accessRightsOpen Access
dc.provenancehttps://v2.sherpa.ac.uk/id/publication/13544..."The Accepted Version can be archived in a Non-Commercial Institutional Repository" from SHERPA/RoMEO site (as at 12/05/2021).
CollectionsANU Research Publications

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