Regulation of Auditor Independence

The research uses NIE and NIS perspectives to analyse the post-Enron response of the UK companies and auditors with regards to joint provision of audit and non-audit services (NAS). Using a sample of 147 FTSE 250 companies, the work provides evidence of changes in NAS purchase behaviour post- Enron. Also, it is found that NAS purchase behaviour varies with varying threats of legitimacy. A qualitative analysis of the auditors' response letters to the draft APB ethical standards reveals that the responses of different groups of auditors varied with the varying threats of legitimacy. Overall, the findings of this book suggest that behaviour in the UK was significantly affected by the events in the US and that UK companies followed strategies both of voluntarily reducing NAS purchase and providing greater NAS disclosure to help maintain confidence in UK financial reporting and auditing.