In this study we examine the association between audit service fees and non-audit service
(NAS) fees and the auditor's final decision regarding the type of opinion to render to a
financially distressed client. Along with examining current fee levels and reporting decisions
we also test the DeAngelo (1981) auditor independence model by examining the
association between future fee receipts and current reporting decisions. Using data from the
post-SOX reporting period of 2004-2006 and a stringent control sample, we find that the …

This study examines the potential for non-audit services to impair auditor independence
using going concern modifications as a proxy for audit quality. While prior research has
focused primarily on Anglo-Saxon environments, this study focuses on Germany because of
the country's unique reporting attributes and lower litigation risk when compared to Anglo-
Saxon settings. Based on a sample of financially stressed manufacturing companies during
the period 2005–2009, the results do not suggest that German auditors are less …