The Impacts of Investors Favor Audits by Same Firm that Prepares Corporation’s Taxes: (A Case Study of Public Corporations’ in Ghana)

Abstract

A new study indicates that despite calls for greater auditor independence, investors prefer companies to be audited by the same firm that also provides it with tax services.A study, which appears in the spring issue of the Journal of the American Taxation Association, published by the American Accounting Association, found that audits gain credibility with investors when they are performed by firms that combine them with tax services.“On average, investors perceive the benefits of auditor-provided tax services (i.e. enhanced financial-reporting quality due to knowledge spillover) to be greater than the cost (i.e., the likely threat to auditor independence associated with auditor – provided tax services),” said the study’s.