0000000000546885
AUTHOR
Jean C. Bedard
Consequences of Justifications of Assessments in French Expanded Audit Reports
Since 2003, French auditors must disclose justifications of assessments (JOAs) in expanded audit reports. Like critical audit matters recently introduced in the US and key audit matters introduced by international standard setters, the purpose of JOAs is to enhance the informative value of audit reports. Based on French audit reports issued from 2002 to 2011, we analyze the impact of first-time implementation of JOAs, and the impact of new JOAs in subsequent years, on investors (measured by abnormal returns and abnormal trading volume) and on the audit (measured by audit report lag, abnormal accruals, and audit fees). For both first-time implementation of JOAs and new JOAs in subsequent yea…
Was the European Commission Green Paper Right? An Evaluation of the French Experience with Joint Auditing
The Green Paper entitled “Audit policy: Lessons from the crisis” (European Commission, 2010) recommends the introduction of joint audit for European listed companies, based on the French experience, to limit the market dominance of the Big 4 and to promote audit quality. However, the regulation passed by the European Parliament in April 2014 does not require, but only encourages the use of two auditors for public-interest entities (European Parliament, 2014). Since many groups of interests tried to influence the European Commission during the consultation process, it is relevant to evaluate the costs and benefits for investors of the unique joint audit system that persists among the occiden…