Journal of Finance and Accountancy：（金融和会计杂志》上）.pdfVIP

Journal of Finance and Accountancy Joint provision of external audit and non-audit services: alternative propositions Jean Baptiste Koffi Dodor, Southern University, Baton Rouge Mary Alice Darby Southern University, Baton Rouge ABSTRACT: Providing jointly external audit and non-audit services to the same client-company remains a major dilemma for the accounting profession. However, recent professional ethics reforms by the IFAC and the AICPA on networks of firms have offered new hopes for a potentially better solution to the problem. In this study, we propose the following three alternative solutions: (1) a same CPA firm provides jointly both services by using separate personnel teams; (2) a same CPA firm provides jointly both services by using two separate special ized divisions; and (3) two legally distinct CPA firms, both members of the same network of CPA firms, provide one the external audit and the other the non-audit services. Because we did not test empirically the propositions in this paper, we suggest that future study transform the propositions into hypotheses and test them empirically. Keywords: Joint provision, External Audit, Non-Audit Services, Network CPA Firms Joint provision, Page 1 Journal of Finance and Accountancy I. INTRODUCTION Increasing competition among public accounting firms, following stagnation of external audit revenues in the 1980s, has forced the expansion of Non-Audit Services (NAS) as alternative sources of revenues for these firms. Estimated between only 7% and 21% of the total revenues o