Download or read book Public Accounting Firms written by Jeanette M. Franzel and published by DIANE Publishing. This book was released on 2004-03 with total page 102 pages. Available in PDF, EPUB and Kindle. Book excerpt: Following major failures in corp. financial reporting, the Sarbanes-Oxley Act of 2002 was enacted to protect investors through requirements intended to improve the accuracy and reliability of corp. disclosures and to restore investor confidence. The act strengthened auditor independence and improved audit quality. Mandatory audit firm rotation (setting a limit on the period of years a public accounting (PA) firm may audit a particular company's financial statements) was considered as a reform to enhance auditor independence and audit quality during the hearings that preceded the act, but it was not included in the act. This report studies the potential effects of requiring rotation of the PA firms that audit public companies registered with the SEC.
Download or read book Mandatory Audit Firm Rotation and Audit Quality written by Mara Cameran and published by . This book was released on 2014 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: In a setting where mandatory audit firm rotation has been effective for more than 20 years (i.e., Italy), we analyse changes in audit quality during the auditor engagement period. In our research setting, auditors are appointed for a three-year period and their term can be renewed twice up to a maximum of nine years. Since the auditor has incentives to be reappointed at the end of the first and the second three-year periods, we expect audit quality to be lower in the first two three-year periods compared to the third (i.e. the last) term. Assuming that a better audit quality is associated with a higher level of accounting conservatism, and using abnormal working capital accruals (AWCA) as a proxy for the latter, we find that the auditor becomes more conservative in the last three-year period, i.e. the one preceding the mandatory rotation. These results are confirmed using Basu's (1997) timely loss recognition model. In an additional analysis, we use earnings response coefficients as a proxy for investor perception of audit quality, and we observe results consistent with an increase in audit quality perception in the last engagement period.
Download or read book Mandatory Audit Firm Rotation and Audit Quality written by Andrew B. Jackson and published by . This book was released on 2010 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study investigates the effect a regime of mandatory audit firm rotation would have on audit quality in an Australian setting. Using two measures of audit quality, being the propensity to issue a going-concern report and the level of discretionary accruals, the study examines the switching patterns of clients in their current voluntary switching capacity, and the levels of audit quality. We find that audit quality increases with audit firm tenure, when proxied by the propensity to issue a going concern opinion, and is unaffected when proxied by the level of discretionary accruals. We conclude that given the additional costs associated with switching auditors there are minimal, if any, benefits of mandatory audit firm rotation. Other initiatives to address concerns about auditor independence and audit quality therefore need be considered before imposing mandatory audit firm rotation.
Download or read book Mandatory audit firm rotation study study questionaires responses and summary of respondents comments written by United States. General Accounting Office and published by DIANE Publishing. This book was released on 2004 with total page 167 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book The Effect of Mandatory Audit Firm Rotation on Audit Quality with Evidence from China written by Chenyang Dai and published by . This book was released on 2018 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Using discretionary accruals as a proxy for audit quality, this paper examines the association between mandatory audit firm rotation and audit quality. The study contributes to the debate on the effect of the mandatory audit firm rotation policy by bringing evidence directly from a setting where such an audit policy is in place. The results of multivariate regressions find no evidence that the adoption of such a policy improves average audit quality in the period thereafter. Other tests focus on the period where the mandatory rotation policy is already in place and examine the potential fluctuation of audit quality in the antecedent and decedent years of a mandatory rotation. The results find no significant difference of the audit quality in the last engagement year of a preceding auditor or in the first engagement year of an incoming auditor. Together with empirical findings in a few other markets where similar audit policies is or was in place, the results of the study argues against the necessity of introducing a mandatory audit firm rotation policy, The study provide implications of relevance for regulators who are considering taking similar measures to improve audit quality.
Download or read book Mandatory Audit Firm Rotation Study written by United States. General Accounting Office and published by . This book was released on 2004 with total page 172 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Auditing Trust and Governance written by Reiner Quick and published by Routledge. This book was released on 2007-10-31 with total page 381 pages. Available in PDF, EPUB and Kindle. Book excerpt: The reputation of corporate reporting has been in crisis. Trust in the process of financial accounting and auditing has been undermined by a series of high profile scandals involving major corporations, including Enron, Parmalat, Ahold, and Worldcom. In response, regulators and practitioners world-wide have put forward a series of initiatives to re
Download or read book Mandatory Job Rotation and Audit Quality in Audit Firms written by Rita Azzi and published by . This book was released on 2014 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This thesis examines the mandatory job rotation and audit quality in audit firms, stressing on the relationship between the rotation policy and its impact on the auditor quality. Does audit firm rotation affect audit quality? And how does the long term auditor clients' relationship affects the auditor quality? In order to answer the above questions we make a full study relative to local versus international audit firms and the services provided by them, taking into consideration several factors that affects the auditor quality such as seniority, long term relationship and turnover rate. This study was supported by a questionnaire addressed to 50 auditors distributed between local and international firms with an analysis over the results. However, this analysis mentioned that auditors working in the international firm where there is a rotation policy are more satisfied than those working in local firms. We conclude also that rotation and the long term relationship are directly related to audit quality.
Download or read book The Effect of Mandatory Audit Firm Rotation on Audit Quality Audit Fees and Audit Market Concentration written by R. Narayanaswamy and published by . This book was released on 2019 with total page 31 pages. Available in PDF, EPUB and Kindle. Book excerpt: In India, the government introduced mandatory audit firm rotation following calls to improve audit quality and auditor independence in the wake of the Satyam accounting scandal. The absence of strong institutional mechanisms to prevent and detect audit failure in a timely manner has led the government to require periodical audit firm rotation. Evidence from firms for the years 2014 to 2017 suggests that mandatory audit firm rotation does not appear to have improved audit quality, reduced audit costs and increased audit market competition.
Download or read book Mandatory Audit Rotation written by Kathleen Harris and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This study investigates whether mandatory auditor rotation rules are associated with changes in audit quality using available data from three countries that have adopted mandatory auditor rotation (MAR) rules. Consistent with prior literature, I assume that earnings management measures capture the various methods employed by corporate insiders to exercise their discretion to manage earnings that is not constrained by the audit firm. The more discretion, ceteris paribus, in earnings, the lower the audit quality. First, I investigate the debonding effect of an MAR policy. Debonding describes the effect that is often the primary motivation for adopting MAR rules. That is, end the possibility of long-term audit engagements and the economic bond of audit firms to their clients will be broken (by enhancing auditor independence and objectivity). In the sample after adoption of MAR rules, the data show evidence of less earnings management, less managing to earnings targets, and more timely loss recognition compared to the sample before adopting MAR rules. From these results, I conclude that audit markets appear to improve, on average, from enactment of MAR rules. I then investigate the allowed discretion in the year before and the year after auditor changes in which rotation rules have been adopted (termed the low client-specific knowledge effect). I find evidence of lower audit quality in both years. These results highlight the importance, particularly to regulators of audit markets, of considering ways to mitigate the erosion of audit quality when making the transition to new auditors under MAR rules (e.g., the use of detailed handover files between predecessor and successor audit firms or "four-eyes principle" in years of initial audits).
Download or read book Audit Regulations Audit Market Structure and Financial Reporting Quality written by Christopher Bleibtreu and published by . This book was released on 2021-11-24 with total page 200 pages. Available in PDF, EPUB and Kindle. Book excerpt: Audit Regulations, Audit Market Structure, and Financial Reporting Quality provides a structured overview of the empirical and analytical literature on the effects of audit market regulations. After a short introduction, the monograph is organized as follows. Chapter II addresses the structure of the audit markets of industrialized countries. First presenting an overview of the concentration metrics used to describe the structure of an audit market or a market segment, then providing the empirical findings on audit market concentration at the national level and presenting an overview of the main reasons that led to the currently high degree of concentration. Chapter III summarizes the reasons why regulators worldwide consider a high degree of concentration to be a concern. In particular, it reviews the regulator's assumption that a high degree of concentration inevitably leads to a low degree of competition and to the corresponding effects of low audit quality and high audit fees. It also provides an overview of the empirical findings on the association between concentration and audit quality and fees, respectively. Chapter IV introduces the mandatory audit firm rotation, the prohibition on the joint supply of audit and non-audit services, and joint audits as examples for regulations that are likely to have both incentive and market structure effects. Chapter V summarizes the empirical findings on the effects of these regulations on audit quality and market structure. Chapter VI summarizes models that regard the market structure as given. The results from these models show that the effects of regulations are not straightforward, but depend on various factors related to the auditor, the client, and the legal environment. Chapter VII gives an overview of analytical research that simultaneously considers incentive effects and market structure effects. It also provides a brief overview of industrial organization models that seem suitable to expand the models applied to investigate the effects of audit regulations. Chapter VIII concludes and highlights avenues for future research.
Download or read book The Effect of Mandatory Audit Firm Rotation on Audit Quality and Audit Fees written by Soo Young Kwon and published by . This book was released on 2014 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: Using a unique setting in which mandatory audit firm rotation was required from 2006-2010, and in which both audit fees and audit hours were disclosed (South Korea), this study provides empirical evidence of the economic impact of this policy initiative on audit quality, and the associated implications for audit fees. This study compares both pre- and post-policy implementation and, after the implementation of the policy, mandatory long-tenure versus voluntary short-tenure rotation situations. Where audit firms were mandatorily rotated post-policy, we observe that audit quality (measured as abnormal discretionary accruals) did not significantly change compared with pre-2006 long-tenure audit situations and voluntary post-rotation situations. Audit fees in the post-regulation period for mandatorily rotated engagements are significantly larger than in the pre-regulation period, but are discounted compared to audit fees for post-regulation continuing engagements. We also find that the observed increase in audit fees and audit hours in the post-regulation period extends beyond situations where the audit firm was mandatorily rotated, suggesting that the introduction of mandatory audit firm rotation had a much broader impact than the specific instances of mandatory rotation.
Download or read book The Routledge Companion to Auditing written by David Hay and published by Routledge. This book was released on 2014-09-15 with total page 387 pages. Available in PDF, EPUB and Kindle. Book excerpt: Auditing has been a subject of some controversy, and there have been repeated attempts at reforming its practice globally. This comprehensive companion surveys the state of the discipline, including emerging and cutting-edge trends. It covers the most important and controversial issues, including auditing ethics, auditor independence, social and environmental accounting as well as the future of the field. This handbook is vital reading for legislators, regulators, professionals, commentators, students and researchers involved with auditing and accounting. The collection will also prove an ideal starting place for researchers from other fields looking to break into this vital subject.
Download or read book Does Mandatory Audit Firm Rotation Improve Audit Quality written by 陳亞蓮 and published by . This book was released on 2017 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Auditors Perceptions of Audit Firm Rotation Impact on Audit Quality in Egypt written by Ahmed Anis and published by . This book was released on 2014 with total page 16 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study aims to explore professional auditors' perceptions of the impact of audit firm rotation on audit quality. It also investigates the possible benefits and determining factors of mandatory auditor rotation. A sample of 83 auditors was drawn from a group of large firms and another of smaller firms in Egypt. Data were analyzed using one sample t-test; the findings indicate that auditors' perceived mandatory rotation of auditors to have a positive effect on audit quality, a negative effect on client-specific knowledge, and a positive impact on auditors' independence. The impact from the auditors' perspective of industry specialization and fee dependence on the relationship between mandatory auditor rotation and audit quality was also determined.
Download or read book External Audit Arrangements at Central Banks written by Mr.Atilla Arda and published by International Monetary Fund. This book was released on 2018-09-11 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper takes stock of external audit arrangements at central banks. Its focus is on the annual audit of central bank financial statements, as well as legal and institutional measures that support audit quality and independence. The paper outlines good practices in these areas and provides a summary of actual practices observed based on a review of audited financial statements and central bank legislation. While the audit frameworks for central banks differ depending on their legal and institutional circumstances, central banks’ external audits increasingly follow international standards. Most of them are audited by auditors with international affiliations and embrace modern governance structures that provide for audit oversight. However, the paper also notes that a sizeable number of central banks do not publish the audit results in a timely manner, which leaves room for improvement in transparency practices.
Download or read book Alleged Audit and Financial Reporting Failures written by Paul Lynn Walker and published by . This book was released on 1999 with total page 94 pages. Available in PDF, EPUB and Kindle. Book excerpt:
