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dc.contributor.authorKrishnan, Gopal V
dc.contributor.authorPevzner, Mikhail
dc.contributor.authorSengupta, Partha
dc.date.accessioned2017-06-28T17:25:57Z
dc.date.available2017-06-28T17:25:57Z
dc.date.issued2011
dc.description.abstractThe objective of this study is to examine the relation between attributes of earnings forecasts issued by managers and audit fees. Although there is an extensive literature on managers’ disclosure of earnings forecasts, there is a paucity of research on how auditors incorporate information from these voluntary disclosures. We find that the issuance of an annual or quarterly management earnings forecast in the prior period is positively associated with the current period audit fees. Our results indicate that on average, audit fees are higher by about 7% for firm-years associated with an annual forecast. Among the firms that issue earnings forecasts, we find no association between audit fees and likelihood of updating a previously issued earnings forecast, indicating that auditors do not view such behavior negatively. Further, we find audit fees to be positively associated with the error and the bias (or optimism) in the forecasts for annual forecasts but not for quarterly forecasts. Overall, these results suggest that management’s forecast behavior captures higher business risk for the auditor via greater risk of earnings management or litigation risk.en_US
dc.description.urihttps://www.researchgate.net/profile/Gopal_Krishnan17/publication/228239221_How_Do_Auditors_View_Manager%27s_Voluntary_Disclosure_Strategy_The_Effect_of_Earnings_Guidance_on_Audit_Fees/links/02e7e523da45614a90000000/How-Do-Auditors-View-Managers-Voluntary-Disclosure-Strategy-The-Effect-of-Earnings-Guidance-on-Audit-Fees.pdfen_US
dc.format.extent42 pagesen_US
dc.genrejournal articlesen_US
dc.identifierdoi:10.13016/M2W66982B
dc.identifier.citationKrishnan, G., Pevzner, M., & Sengupta, P. (2011). How Do Auditors View Manager's Voluntary Disclosure Strategy? The Effect of Earnings Guidance on Audit Fees. Journal of Accounting and Public Policy, 31(5), 492-515en_US
dc.identifier.uri10.1016/j.jaccpubpol.2011.10.009
dc.identifier.urihttp://hdl.handle.net/11603/4266
dc.language.isoen_USen_US
dc.publisherElsevieren_US
dc.relation.isAvailableAtUniversity of Baltimore
dc.subjectAudit feesen_US
dc.subjectManagement Earnings forecastsen_US
dc.subjectLitigation Risken_US
dc.subjectFraud Risken_US
dc.titleHow Do Auditors View Manager's Voluntary Disclosure Strategy? The Effect of Earnings Guidance on Audit Feesen_US
dc.typeTexten_US


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