Non-audit services and auditor independence: empirical findings from Bahrain

Prem Lal Joshi, Wayne G. Bremser, J. Hemalatha and Jawaher Al-Mudhaki

International Journal of Accounting, Auditing and Performance Evaluation, 2007, vol. 4, issue 1, 57-89

Abstract: We report on a questionnaire survey of audit firms and listed companies in the Kingdom of Bahrain to investigate the perceptions on the issue of auditors' independence with regard to rendering non-audit services (NAS). Our survey results of auditors and client executives support the proposition that independence is impaired if the auditor also renders non-audit services. However, most respondents from both groups indicated that NAS provided by company auditors affects the auditor independence to a limited extent only, and opine that such services should not be prohibited. Most listed companies obtain NAS from their company auditors, but the NAS fee ratio to audit fees is not high. Auditors and listed companies perceive that independence is not at all compromised or tends to be compromised to a limited extent for 15 types of NAS. The perceptions differed based on the size, non-audit fees and foreign operations for some of the NAS.

Keywords: auditor independence; Bahrain; non-audit services; regulation; rotation. (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (4)

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