1. Corporate Governance and Financial Reporting Research
Discussion of “Types of Nonaudit Fees and Financial
Reporting Quality” by Huang et al. (2007) AJPT

2. Purpose of the Paper
To investigate whether components of nonaudit fees affect auditor independence quality and financial reporting quality.

3. Motivation & Contribution
I. Motivation: Should SOX prohibit all nonaudit services? we extend research of Ashbaugh et al. (2003) and examine NAS components. II. Contribution: provide further evidence for regulator and legislator for additional revisions of laws.

4. Sample Data and Method
I. Sample Data: 3,622 and 3, 269 non-financial firms with data in 2003 and II. Replicate all models of Ashbaugh (2003) and replace total NAF by NAF components: ARF, TAX, OTH. II. Regression models are used: Discretionary Accruals (M3/T3) Earnings Surprise (M4/T4) Earnings Increase (M4/T4)

5. Results/Conclusion
+DCA_PA= controls + NAF components (M3/T3) No consistent results for all components. ARF, TAX, OTH has no significant influence on positive DCA. -DCA_PA= controls + NAF components (M3/T3) ARF, TAX, OTH has no significant influence on negative DCA

6. Results/Conclusion
Earnings Surprise = controls + Nonaudit Fees (M8/T7) No significant results for all components. ARF, TAX, OTH has no significant influence on Earnings Surprise. Earnings Increase = controls + Nonaudit Fees (M8/T8) ARF, TAX, OTH has no significant influence on small EPS increase.

7. Extension
I. Partner-Level research; II. Auditor Gender matters? III. International / Local applications.