Auditor Tenure And Audit Quality
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Estimating The Effect Of Auditor Tenure On Audit Quality
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Author : Junwei Peng
language : en
Publisher:
Release Date : 2015
Estimating The Effect Of Auditor Tenure On Audit Quality written by Junwei Peng and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.
After several major financial scandals, mandatory auditor rotation was raised as a measure to improve the auditor independence. For regulators who are to set mandatory rotation limit need detailed information about the turning points of the inverted U-shaped relationship between audit quality and auditor tenure, such as the statistical implication of a representative turning point of audit quality obtained by OLS estimation based on quadratic model or even the entire distribution of the sample firm-auditors' turning points. These two problems remain unsolved. This paper derived the statistical implication of the representative turning point of audit quality obtained by OLS estimation based on quadratic model. This paper also proposed an estimation method based on survival analysis to estimate the entire distribution curve for the turning points of all the sample firm-auditors in the form of their cumulative probability curve. Mote Carlo simulation was used to the performance of various estimation methods, such as accuracy, robustness, and information usefulness.
Auditor Tenure And Audit Quality
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Author : Chun-sŏ Yi
language : en
Publisher:
Release Date : 2015
Auditor Tenure And Audit Quality written by Chun-sŏ Yi and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.
Does Auditor Tenure Improve Audit Quality Moderating Effects Of Industry Specialization And Fee Dependence
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Author : Chee Yeow Lim
language : en
Publisher:
Release Date : 2015
Does Auditor Tenure Improve Audit Quality Moderating Effects Of Industry Specialization And Fee Dependence written by Chee Yeow Lim and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with categories.
We investigate whether the relation between auditor tenure and audit quality is conditional on auditor specialization and fee dependence. Although prior studies have investigated the relation between extended auditor-client tenure and audit quality, none has examined how this relation is jointly influenced by both auditor specialization and fee dependence. Our main analyses, using accrual quality as a measure of audit quality, show that firms audited by specialists (vs. non-specialists) have relatively higher audit quality with extended auditor tenure, and that this relation is negatively moderated by auditors' fee dependence on clients. These results are robust to sensitivity tests, and alternative proxies for audit quality such as the issuance of going concern opinions and the market's response to quarterly earnings surprises.
Auditor Tenure And Audit Quality
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Author : Li Zheng Brooks
language : en
Publisher:
Release Date : 2011
Auditor Tenure And Audit Quality written by Li Zheng Brooks and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011 with categories.
Audit Firm Tenure And Audit Quality
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Author : Wei Quan
language : en
Publisher:
Release Date : 2007
Audit Firm Tenure And Audit Quality written by Wei Quan and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2007 with Auditing categories.
The objective of this thesis is to examine whether the length of the auditor-client relationship (audit tenure) is associated with reduced auditor independence, particularly in terms of auditors permitting excessive earnings management by their clients.
Auditor Tenure And The Timeliness Of Misstatement Discovery
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Author : Zvi Singer
language : en
Publisher:
Release Date : 2017
Auditor Tenure And The Timeliness Of Misstatement Discovery written by Zvi Singer and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2017 with categories.
Using the timeliness of misstatement discovery as a proxy for audit quality, we examine the association between audit firm tenure and audit quality in a setting that alleviates the endogeneity problem endemic to this line of research. We find that longer audit firm tenure leads to less timely discovery and correction of misstatements, which is consistent with a negative effect of long auditor tenure on audit quality. In addition, using the non-voluntary auditor change following the demise of Arthur Andersen in 2002 as a natural experiment, we show that the misstatements of its former clients were discovered faster than those of comparable companies that retained their auditors throughout the misstatement. This finding speaks to the benefit of a fresh look by a new auditor. An extended analysis shows that longer auditor tenure also leads to misstatements of greater magnitudes, and that the Sarbanes-Oxley Act has mitigated, but not eliminated, the negative effect of long auditor tenure. Lastly, we show that the negative association between auditor tenure and timely discovery of misstatements is mainly present in the first ten years of an audit engagement. Our study has implications for regulators who continue to express concern regarding lengthy auditor-client engagement.
The Effect Of Audit Quality On The Relationship Between Audit Committee Effectiveness And Financial Reporting Quality
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Author : Johanna Miettinen
language : en
Publisher: University of Vaasa
Release Date : 2008
The Effect Of Audit Quality On The Relationship Between Audit Committee Effectiveness And Financial Reporting Quality written by Johanna Miettinen and has been published by University of Vaasa this book supported file pdf, txt, epub, kindle and other format this book has been release on 2008 with Audit committees categories.
Tiivistelmä: Tilintarkastuksen laadun vaikutus tarkastusvaliokunnan tehokkuuden ja taloudellisen tiedon laadun väliseen suhteeseen.
Audit Firm Tenure And Audit Quality
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Author : Li Zheng Brooks
language : en
Publisher:
Release Date : 2013
Audit Firm Tenure And Audit Quality written by Li Zheng Brooks and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with categories.
We propose that audit quality is likely to increase in the earlier years due to a Learning Effect and in later years it decreases due to a Bonding Effect. Adopting a quadratic model, we find that the average turning point is between 12 to 16 years for a large sample of U.S. firms. With an average tenure of 9 years in our sample, these findings imply that mandatory auditor firm rotation may not be necessary. Further, we find that the turning point varies by auditor - it is longer for non-Big N auditors, non-specialist auditors, and auditors with high client importance, and the deterioration of audit quality exists in low litigation industries only, consistent with the Bonding Effect explanation. Moreover, we find the turning point gets longer in the post-SOX period. Our results have implications for the current debate on mandatory audit firm rotation.
Selection Bias In Audit Firm Tenure Research
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Author : Ce Wen
language : en
Publisher:
Release Date : 2018
Selection Bias In Audit Firm Tenure Research written by Ce Wen and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2018 with categories.
Prior studies find that long auditor tenure improves audit quality. An alternative explanation, however, is that low audit quality increases auditor turnover, thereby self-selecting into the short-tenure group. To disentangle these explanations, this paper examines selection bias in audit firm tenure research in three steps. First, we empirically demonstrate the existence of self-selection. We find that the length (or duration) of the auditor-client relationship is not random: firms that have higher audit quality, higher profitability, and lower risk are more likely to have long relationships with their auditors. Second, we use simulated panel data to illustrate that, when self-selection exists, results consistent with long tenure improving audit quality may be obtained, even if lengthened tenure has no impact or even an adverse impact on audit quality. We show that incorporating fixed effects is critical to address the selection bias. Third, we examine commonly used audit-quality proxies and find that, after controlling for selection bias, there is little evidence that auditor tenure affects audit quality or perceived audit quality. Our results suggest that the previously documented positive association between auditor tenure and audit quality reflects selection bias, instead of a treatment effect.
Does Mandatory Auditor Tenure Disclosure Improve Audit Quality
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Author : Anushka Shrestha
language : en
Publisher:
Release Date : 2021
Does Mandatory Auditor Tenure Disclosure Improve Audit Quality written by Anushka Shrestha and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021 with categories.