Auditor

AUDITOR EXPERIENCES OF CORPORATE GOVERNANCE IN THE POST SARBANES-OXLEY ERA

Jeffrey Cohen Associate Professor Boston College cohen@bc.edu

Ganesh Krishnamoorthy Associate Professor Northeastern University g.krishnamoorthy@neu.edu

Arnie Wright Professor Northeastern University

Data availability: Contact the authors.

We would like to acknowledge the comments of participants at the following conferences/workshops: 2007 Alternative Perspectives on Accounting Research Conference held in Quebec City, Boston College Accounting Research Workshop, and the 2007 International Symposium on Auditing Research in Shanghai.

AUDITOR EXPERIENCES OF CORPORATE GOVERNANCE IN THE POST SARBANES-OXLEY ERA

Abstract: This study extends Cohen, Krishnamoorthy, and Wright (2002) by examining auditors’ experiences in working with corporate governance actors (e.g., audit committee, board, management, other committees) in the post-Sarbanes Oxley era. Thirty audit managers and partners from three of the Big 4 firms participated in the study. Auditors indicate that the corporate governance environment has significantly improved in recent years with audit committees that are more active and diligent and possessing greater expertise and power to fulfill its responsibilities. However, management continues to be seen as a major actor in the corporate governance mosaic. Of some concern, auditors indicate that management is seen as a key driver in determining auditor appointments and terminations. Similar to Gendron and Bédard (2006), results indicate that in many instances, audit committees play a passive role in helping to resolve disputes with management. Finally, the requirements for CEO and CFO certification are reported to have a positive affect on the integrity of financial reporting.

Key words: audit committee, corporate governance, audit process, Sarbanes-Oxley.

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AUDITOR EXPERIENCES OF CORPORATE GOVERNANCE IN THE POST SARBANES-OXLEY ERA

I. Introduction In the...