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Study Says Investors Need to Know About Audit Offshoring

Tammy Whitehouse | January 29, 2015

Apparently doubting the quality of the audit, investors punish companies when they first learn that others from outside the principal audit firm had a hand in assuring the company’s financial statements.

Dee-carol-0115An academic study recently published by the American Accounting Association says investors would benefit from disclosures like those proposed by the Public Company Accounting Oversight Board that would require auditors to identify who outside of the principal audit firm participated in the audit. “Many people don’t realize that most audits of multinational companies involve more than one auditing firm,” said Carol Callaway Dee, associate professor of accounting at the University of Colorado,...

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