SUMMARY Using structured interviews and surveys of practicing audit partners, this study examines their perceptions with regard to mandatory partner rotation and cooling-off periods, and how recently enacted, more stringent rules, may negatively impact auditors' quality of life to the detriment of audit quality. Results suggest rotation, in general, increases partners' workloads and the likelihood of relocation. Additionally, results suggest that in response to accelerated rotation (and an extended cooling-off period), partners would rather learn a new industry than relocate. Importantly, partners perceive audit quality suffers from retraining, but not from relocating. Thus these results suggest an indirect, negative impact, and unintended consequence, of accelerated rotation/extended cooling-off periods on audit quality. Data Availability: The survey instrument is available upon request. Individual audit partner responses are confidential.

In 2004, the Public Company Accounting Oversight Board (PCAOB) began inspecting registered accounting firms performing audits of US publicly-traded companies. We examine triennially inspected auditors' involuntary and voluntary client losses in the period following receipt of a deficient PCAOB report. We find deficiency reports are associated with triennially inspected auditors being involuntarily dismissed by their clients, and companies dismissing triennially inspected auditors are more likely to hire triennially inspected auditors without deficiency reports, suggesting PCAOB inspections may be costly to triennially inspected auditors. We also find deficiency reports are associated with triennially inspected auditors voluntarily resigning from their publicly traded clients, and ceasing to be registered with the PCAOB, suggesting triennially inspected auditors with deficiency reports may be more likely to assess the post-inspection cost of regulatory compliance as greater than the rewards associated with auditing public companies. These findings are important to regulators, market participants, and academics -both in the US and internationally -as they evaluate whether provisions of SOX effectively address concerns about audit quality or may have unintended negative consequences.

Large accounting firms are increasingly performing audit and tax work for U.S.-based clients (and clients of other highly developed countries) in offshore locations, particularly India. Such arrangements are advantageous because of the availability of a skilled labor pool at a substantially lower cost than U.S. personnel, and the ability of the firms to operate nearly around the clock due to time differences between the U.S. and India. However, offshoring also creates substantial challenges in managing engagement teams comprised of individuals from culturally diverse backgrounds who rarely, if ever, communicate face to face. This paper identifies some of these challenges and their implications for the education of U.S.-based accountants.

SYNOPSIS:This article discusses the findings of structured interviews with audit practitioners with a goal of increasing our understanding of the audit fee estimation process and how that process has changed following the passage of the Sarbanes-Oxley Act of 2002 ͑SOX͒. The data provide practicing auditors with information that may be helpful in the development or revision of their own audit fee pricing practices. The data are also relevant to audit committee members as they seek to better understand the audit fee pricing process and how potential risk areas or other matters may impact audit fees. Researchers may also find the results of the interviews useful for the enhancement of audit fee pricing models, whether to more-closely align estimation models with the reported fee estimation process, or to revise models to reflect post-SOX economic and regulatory changes.