Is NAS a Suitable Proxy for Auditor Independence in the Post-SOX Period?

Before implementation of the Sarbanes Oxley Act (SOX) in 2002, researchers frequently used fees from non-audit services (NAS) as a surrogate for auditor independence. NAS is still used in this way, even though SOX has restricted the types of NAS that auditors may provide to their clients. Therefore, we pose the following question: What does the literature say about the continuing adequacy of NAS as a surrogate for auditor independence in the post-SOX era? This question is relevant to research in accounting regulation because, if NAS is no longer an adequate surrogate, then research on auditor independence may provide biased results.Overall, we find that many post-SOX studies using NAS have insignificant or counterintuitive results, whereas pre-SOX studies using NAS predominantly have significant results suggesting that NAS impairs auditor independence. Is this shift in findings because NAS is no longer an adequate proxy for independence? We discuss this issue and provide our conclusions, citing relevant research where applicable