Audit tenure and audit Qualifications in a low litigation risk setting: An analysis of the Spanish market

Blandón, Josep García; Bosch, Josep Maria Argilés i

doi:10.4067/s0718-52862013000200002

Cited by 15 publications

(5 citation statements)

References 38 publications

(61 reference statements)

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Tenure and rotation of the audit firm measure the independence of the auditor (García Blandón & Argilés Bosch, 2013), even if it is not clear what effect such rotation might have on the value relevance of accounting figures. According to Dattin (2017), differences in the regulation between EU member states could help to explain the inconclusive results.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Auditor Independence and Value Relevance in the European Banking Sector: Do Investor Protection Environment and Corporate Governance Matter?

Cimini

Mechelli

Sforza

2020

Journal of Accounting, Auditing & Finance

View full text Add to dashboard Cite

Our study explores the effects of statutory auditor’s independence on value relevance, measuring the different impact against the quality of country-level investor’s protection and firm-level corporate governance. A sample of 98 European financial entities listed on the stock markets of 15 countries in the period from 2009 to 2014 is used to measure statutory auditor independence by taking into account audit firm tenure, partner tenure, and the percentage of nonaudit fees. Findings demonstrate that in different investor protection environments or in the presence of differences in corporate governance quality, phenomena that could be interpreted as a deterioration of the auditor independence do not necessarily determine a decrease in the value relevance of accounting numbers. Rather, they may determine a possible increase if the knowledge spillover effects prevail over the perception that independence has deteriorated. These findings add to the literature and provide regulators with insights by suggesting that not only accounting and auditing practices but also country features or firm-level corporate governance quality might influence the outcome of reforms on the independence of the statutory auditor as well as value relevance judgments.

show abstract

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Auditor Independence and Value Relevance in the European Banking Sector: Do Investor Protection Environment and Corporate Governance Matter?

Cimini

Mechelli

Sforza

2020

Journal of Accounting, Auditing & Finance

View full text Add to dashboard Cite

show abstract

“…1 allocates Spain in the group of countries with a more favourable, less strict, context for the audit firms in the period before the 2014 EU regulation, with no audit firm rotation, a less severe limitation of non-audit services and no cap on fees. The favourable context for the audit firms in Spain was also 'blessed' with the existence of low litigation risk in the country (Garcia-Blandon & Argilés-Bosch, 2013a). The low litigation risk context in Spain did not result in significantly lower levels of audit quality associated with either the provision of non-audit services or long audit tenures (Garcia-Blandon et al, 2017).…”

Section: The Spanish Audit Contextmentioning

confidence: 98%

“…According to this directive, audit firm rotation was optional, whereas audit partner rotation was compulsory for every five to seven years, with a two-year cooling-off period (Horton et al, 2018) 3 . Spain opted for a seven-year audit partner rotation, like Germany, in contrast to the five years in the UK or the 6 years in France (Garcia-Blandon & Argilés-Bosch, 2013a). Table 1 shows the audit framework in some EU countries before the 537/2014 EU regulation.…”

Section: The Spanish Audit Contextmentioning

confidence: 99%

Implementing mandatory audit firm rotation: Effects on audit and non-audit fees

Basioudis,

Cuellar-Fernández,

Garcia-Lacalle

2024

Rev. contab.

View full text Add to dashboard Cite

The 2014 reform of the European Union (EU) regulation on auditing includes mandatory audit firm rotation and a significant limitation of the provision of non-audit services by the audit firm to their existing clients. This paper analyses the changes in audit fees, and non-audit fees, as well as in their proportion, when there is a switch of audit firms, before and after the new regulation. The analysis is carried out for the Spanish-listed companies from 2011 to 2018 using two types of analyses, descriptive/comparative and multivariate, panel data, and regressions. As expected, the new EU regulation has resulted in a significant increase in audit firm switches. The results show that, when there is a change of audit firm, the incoming firm offers a significant discount to the new client with the outgoing firm. This is the case before and after the reform, and for both voluntary and mandatory switches after the reform. In addition, the reform has led to a reduction of non-audit fees, which is especially evident after a voluntary audit firm switch. We conclude that audit firms seem to be willing to take on the additional cost of auditing a new company to gain clients. La reforma de la normativa de la Unión Europea sobre auditoria de 2014 incluye la rotación obligatoria de la firma de auditoría y una importante limitación de trabajos distintos de auditoria por parte del auditor. Este trabajo analiza los cambios en los honorarios de auditoría, honorarios por otros servicios, así como la proporción entre ambos, cuando se produce un cambio de firma de auditoría, antes y tras la nueva normativa europea. El análisis se realiza para las entidades cotizadas en España durante los años 2011 a 2018 mediante de dos tipos de análisis, descriptivo/estadísticos y de regresiones de datos panel. La nueva regulación ha supuesto un aumento en los cambios de firmas de auditoría. Los resultados muestran que, cuando hay un cambio de firma de auditoría, la firma entrante ofrece un descuento significativo al nuevo cliente en comparación con la firma saliente. Esto es así antes y después de la reforma y, en este último caso, tanto para cambios voluntarios como obligatorios tras la misma. La reforma ha supuesto una reducción de los honorarios por servicios distintos de auditoría, que se manifiesta especialmente después de un cambio voluntario de firma de auditoría tras la reforma. Las firmas de auditoría parecen dispuestas a asumir el coste adicional de auditar a una nueva empresa con el objetivo de ganar clientes.

show abstract

“…Researches have empirically found affirmative relationship among audit tenancy and audit quality (Jayeola et al (2017). Other studies established negative link between tenure of audit and quality of audit (Blandon & Bosch, 2013). Jayeola et al (2017) opined that the influences of audit tenancy on quality of audit are still unsettled matter.…”

Section: Audit Tenure and Accounting Conservatism (Ac)mentioning

confidence: 99%

Untitled

2023

EJAAFR

View full text Add to dashboard Cite

This study investigated the effects of audit quality characteristics in areas of audit independence, audit firm size and audit tenure on accounting conservatism among listed firms in Nigeria. The study used longitudinal and correlation research designs. The population of the study consists 151 firms listed on the Nigerian Exchange Group as at 31st December, 2022. Statistics was analyzed using descriptive in addition to inferential statistics and panel data regression analysis. The results revealed that audit independence had significant positive effect {0.138(0.004)} on accounting conservatism, audit firm size had significant negative effect {-0.0623(0.050)}, while audit tenure had a positive but insignificant effect {0.110(0.494)}. The study recommended that firms in Nigeria should be conscious of the quality of the mechanism imputed into audit engagement in order to ensure audit quality as it has implication on quality of output. Firms should also not compromise audit independence in order to present globally accepted financial reports.

show abstract

Audit tenure and audit Qualifications in a low litigation risk setting: An analysis of the Spanish market

Cited by 15 publications

References 38 publications

Auditor Independence and Value Relevance in the European Banking Sector: Do Investor Protection Environment and Corporate Governance Matter?

Auditor Independence and Value Relevance in the European Banking Sector: Do Investor Protection Environment and Corporate Governance Matter?

Implementing mandatory audit firm rotation: Effects on audit and non-audit fees

Untitled

Contact Info

Product

Resources

About