Independence: The Fall Of Andersen And The Rise Of Sarbanes Oxley

Abstract

In this study, the author examines the audit firms’ fees associated with audit services and audit-related services as a percentage of total fees charged to individual firms as reported to the SEC.  This study was motivated by discussion of the impacts on audit opinions of the amount of work beyond an audit for which an auditing firm contracts.  The results indicate that the fees that Arthur Andersen charged its individual clients indeed had a lower percentage of total fees associated with audit work.  Further, for the year 2002, on average, firms reported a higher percentage of fees from auditors were associated with audit work.  Firms that previously contracted with Arthur Andersen contracted significantly less non-audit services than their counterparts.