Alternatively, perception-based proxies may be more powerful in detecting audit quality
dimensions not captured by output-based proxies.
For example, NAS may reduce the quality of client footnote disclosures, a dimension not captured by DACorGCs, that should be captured by investor perceptions.
A limitation of this research, however, is that firms are not required to disclose the type of NAS they purchase, with the exception of tax and systems NAS.
The proxy typically used, total NAS fees, captures only the threat of financial dependence, but not the threat to
independence from auditor staking on management roles.
Thus, NAS studies may not adequately capture the channel through which NAS impairs audit quality.