Title

Provision of Non-audit Services and Individuals’ Investment Decisions: Experimental Evidence

Department

Economics, Finance, & Quantitative Analysis

Document Type

Article

Publication Date

2007

Abstract

We conduct an experiment to investigate whether concerns about an auditor's independence and reputation affect individuals' investment decisions. We examine whether the disclosure of audit and non-audit fees affects participants' investment decisions. We find that investment in clients of a less reputable auditor is reduced relative to that in other companies when non-audit fees exceed audit fees. Participants' investment in companies audited by a reputable auditor, however, is not affected by fee disclosures.