| Summary: | 碩士 === 輔仁大學 === 會計學系碩士班 === 94 === This study is aimed at examining the effects of the Enron Case, Sarbanes & Oxley Act and Procomp Case on the auditors’ independence. That is to test whether the auditors’ independence and quality are enhanced after these events. Because of the inherent unobservability of auditors’ independence and quality, this study use audit opinion and discretionary accruals to proxy the auditors’ independence and quality. Furthermore, in order to reduce the possible measurement error in the estimation of earnings quality, this study adopts Kothari et al.（2005） performance adjustment method to include concurrent ROA in the cross-sectional Modified Jones Model.
The empirical results show that the contagious effects of the Enron case, Sarbanes & Oxley Act and Procomp case make the auditors improve their Independence and, hence, their audit quality. That is to say, the audit failure of failed auditors and their competitors reinforce audit procedures after these three events that make auditors issue more stringent audit opinion and their audit clients’ lower the magnitude of discretionary accruals than before. Hence, the Enron Case and Sarbanes & Oxley Act part of the empirical results are consistent with prior studies (e.g. Fu et al., 2005 and Lai, 2004). And this study evidences that the Procomp Case enhances auditors’ independence further.
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