Low-balling

Read the sections: “Introduction”, “Summary and Conclusions”. Responded the following questions: 1. What is low-balling? On what types of engagements does low-balling occur? Why might the practice of low-balling impair an auditor’s independence? 2. The author’s list five reasons low-balling might have ceased post-SOX. Do you find these explanations reasonable? Select the reason you find most compelling and explain why you find it to be convincing. 3. The authors discuss the frequency of auditor resignations and dismissals. Read this section of the paper. Post-SOX are auditors more or less likely to take on a client when the prior auditor resigned or was dismissed? What does this suggest about how auditors tolerate engagement risk in the post-SOX period? 4. Use google to look for more recent publications that cite this study and examine initial engagement audit fees. Does this study appear to be consistent with the majority of studies or is it an outlier?