The effects of audit firm rotation on perceived auditor independence and audit quality

Daniels, Bobbie W.; Booker, Quinton

doi:10.1016/j.racreg.2011.03.008

Cited by 71 publications

(51 citation statements)

References 13 publications

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“…Importantly, accountability can be a diffuse, perceptual state such that individuals feel generally responsible for their actions without having explicit entities or individuals to whom they feel accountable. For example, researchers have suggested that rather than relying on explicit incentives, organizational design such as rotation policies can be effectively used implicitly to counter agency problems in banking and audit industries (Daniels & Booker, 2011;Hertzberg et al, 2010). Even though the nature of moral hazard (i.e., the non-verifiability of subjective risk assessments) remains unchanged, it is possible that having rotational policies induces felt accountability and alters reporting behavior.…”

Section: Accountability As a Results Of Unit-reportingmentioning

confidence: 99%

Work-report formats and overbilling: How unit-reporting vs. cost-reporting increases accountability and decreases overbilling

Desai

Kouchaki

2015

Organizational Behavior and Human Decision Processes

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Section: Accountability As a Results Of Unit-reportingmentioning

confidence: 99%

Work-report formats and overbilling: How unit-reporting vs. cost-reporting increases accountability and decreases overbilling

Desai

Kouchaki

2015

Organizational Behavior and Human Decision Processes

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“…Over the last few decades the association between audit quality and auditor tenure has been constantly debated (e.g., Jackson et al, 2008;Daniels & Booker, 2011), especially after the failures of Enron and Worldcom. Belen et al, (2014) studied the auditor tenure association with audit quality by using a sample of 254 audits carried out on Spanish state-owned foundations between 2003 and 2010.…”

Section: Audit Tenurementioning

confidence: 99%

Determinants of Audit Fees: Evidence from Jordan

Kikhia¹

2014

AFR

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This study sets out to examine the factors influencing the level of external audit fees paid by firms to their auditors in Jordan. Specific attention is focused on the investigation of the potential influence of auditee size, complexity of client, profitability, client risk, auditor size and auditor tenure on audit fees, by using the Sample which contains 117 non-financial Jordanian companies which listed on Amman Stock Exchang, meet the selection standards and have the applicable and appropriate financial data from 2010 until 2012 (351 observation). The current study strongly reinforces that greatest of prior studies results are also appropriate and applicable to the Jordanian audit market. Moreover, the current study provides further evidence connecting variables such as the auditor tenure effects and auditee risk which have been found to have an inconclusive relationship with the amount of external audit fees in prior studies. However, the auditee size seems to have been the key determinant of external audit fees. Furthermore, financial risk is found to be negatively and significantly associated with the level of external audit fees. On other side, empirical results found that the audit tenure has no significant relationship with audit fees. Finally, the current study is unique because it is the first to empirically examine factors impacting the level of audit fees in Jordan for a total of three years; it revisits the audit fee literature and highlights the important determinants that affect audit fees.

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“…Kim, Min and Yi (2004) found that the discretionary accruals of the Korean listed companies under the semi-compulsory rotation were lower, so the auditor rotation system had a substantial impact on financial reporting. Daniels and Booker (2006) found that the enforcement of compulsory rotation changed the perception of the auditing independence but not the audit quality. Geiger and Raghunandan (2002), Ghosh and Moon (2005) think that limited audit tenure is not conducive to the accumulation of audit experience and the improvement of auditing professional competency.…”

Section: Theoretical Analysis and The Research Hypothesismentioning

confidence: 96%

State Ownership, Auditor Rotation and Audit Quality

Wang¹,

Zhu²

2018

Proceedings of the 2nd International Conference on Culture, Education and Economic Development of Modern Society (ICCESE 2018)

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Abstract-This paper examines whether the auditor rotation affects the audit quality of state owned enterprises (SOEs) based on the data of China's listed companies that switching audit firms in the period from 2004 to 2014. The results from our sample show that the auditor rotation has significant positive impact on the audit quality of central SOEs, but not local SOEs or non-state-owned enterprises. Further analysis divides the auditor rotation into the compulsory and the optional according to the SASAC rules. The result shows that the compulsory rotation behaves better than optional rotation in improving the auditing quality for central SOEs. This paper provides some empirical evidences for perfecting the SASAC rules and China's auditing markets.

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The effects of audit firm rotation on perceived auditor independence and audit quality

Cited by 71 publications

References 13 publications

Work-report formats and overbilling: How unit-reporting vs. cost-reporting increases accountability and decreases overbilling

Work-report formats and overbilling: How unit-reporting vs. cost-reporting increases accountability and decreases overbilling

Determinants of Audit Fees: Evidence from Jordan

State Ownership, Auditor Rotation and Audit Quality

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