Therefore, qualified audit reports represent the 14% of the total reports examined.
As expected, firms with qualified audit reports are relatively small, show high levels of financial leverage and stocks and are relatively less profitable compared with firms with unqualified audit reports.
of North Texas), examining such specific topics as: current issues in European bank regulation in relation to government spending and borrowing, the relative effectiveness of qualified audit reports
as accountability mechanisms in Spain, long-range anomalies in the real return on corporate equity compared with realized returns from the real assets on corporations, stability and the recently expanded commodity futures trading in oil and gold, unintended consequences of electric power regulations requiring retail utilities to buy all the power produced by wind and solar generators linked to the grind, and evidence concerning the value of technical analysis to portfolio performance.
Craswell (1999) suggested that qualified audit reports are a strong indicator that independence has not been compromised, due to the competitive nature of auditing.
(1) See Laing (2007) for details of qualified audit reports prior to 2007.
Charles Tilley asks why qualified audit reports
are still accepted in the public sector ("A favourable variance", September).
See also Peter Dodd, Nicholas Dopuch, Robert Holthausen, and Richard Leftwich, "Qualified Audit Opinions and Stock Prices," Journal of Accounting and Economics 6 (1) 1984; Dopuch, Holthausen, and Leftwich, "Predicting Audit Qualifications with Financial and Market Variables," The Accounting Review 62 (3) 1987; Michael Firth, "Qualified Audit Reports
: Their Impact on Investment Decisions," The Accounting Review 53 (3) 1978; Lon Holder-Webb and Mike Wilkins, "The Incremental Information Content of SAS No.
CIMA has responded to the Accounting Standards Board's consultation paper, "IASB ED of a proposed IFRS for SMEs", and to the Financial Reporting Council (FRC) on its proposal to encourage the voluntary disclosure of qualified audit reports
. It has also made comments to the FRC on the latest review of the Combined Code and has welcomed the most recent consultation on the European Commission's simplification initiative.
This area is of particular concern in light of the numerous qualified audit reports
submitted to thrift regulators which went unheeded.