Audit Firm Tenure and Audit Quality: Evidence from U.S. Firms

2012 ◽  
Author(s):  
Li Zheng Brooks ◽  
C.S. Agnes Cheng ◽  
Kenneth J. Reichelt
Keyword(s):  
Audit Quality ◽  
Audit Firm ◽  
Quality Evidence

scholarly journals Impact of Audit Firm Rotation on Audit Quality: Evidence from Bhutan

2019 ◽  
Vol 8 (2S3) ◽  
pp. 1410-1417
Keyword(s):  
Audit Quality ◽  
Research Study ◽  
Indirect Evidence ◽  
Secondary Data ◽  
Listed Companies ◽  
Positive Relation ◽  
Public Companies ◽  
Audit Firm ◽  
Quality Evidence

This research study examines the effects of audit firm rotation on audit quality for non- financial public listed companies in Bhutan. Currently, Bhutan has only 21 companies listed on the Royal Securities Exchange of Bhutan Limited (RSEBL). Secondary data obtained for the period of 10 years, between 2009 to 2018, were analyzed using regression analysis. Abnormal Working Capitals Accruals (AWCA) has been used as proxy for audit quality. The study concludes that audit firm rotation has an insignificant but positive relation with AWCA. Thus, in Bhutan audit firm rotation does not affect audit quality for non-financial public companies, which are in tune with prior studies. Further, it was observed that there is an insignificant relation between AWCA and all control variables with the exception of growth. Growth has a decreasing trend at the rate of -0.13 percent while the trend analysis of AWCA shows that audit quality of non-financial public listed companies has been increasing at the rate of 21.01 percent which is an indirect evidence of low audit quality

scholarly journals Does audit firm size contribute to audit quality? Evidence from two emerging markets

2014 ◽  
Vol 11 (2) ◽  
pp. 108-119 ◽  
Author(s):  
Chen-Chin Wang ◽  
Fan-Hua Kung ◽  
Kai-Hsun Lin
Keyword(s):  
Emerging Markets ◽  
Earnings Management ◽  
Information Asymmetry ◽  
Audit Quality ◽  
Discretionary Accruals ◽  
Audit Firm ◽  
Bid Ask Spread ◽  
Audit Firms ◽  
Quality Evidence

This study investigated whether the Big N audit firms in emerging markets can provide audits of high quality and mitigate information risk, by comparing the audit quality of Big N audit firms in Taiwan with those in China. The two countries share a similar cultural background and engage in frequent economic exchange; however, they have different legal systems and institutional environments. This study followed previous research in the use of bid-ask spread and discretionary accruals as proxy variables for information asymmetry and audit quality. Our results indicate that politico-economic differences between Taiwan and China influence the effectiveness of independent auditors when it comes to the mitigation of information asymmetry. Big N audit firms in Taiwan helped to mitigate information asymmetry and provided audit services of higher quality, whereas Big N firms in China were better able to constrain earnings management. Our results indicate that market concentration and market share have a stronger influence on reputation incentive and audit quality than does the size of an audit firm.

Audit firm rotation and audit quality: evidence from academic research

2013 ◽  
Vol 26 (1) ◽  
pp. 75-84 ◽  
Author(s):  
David S. Jenkins ◽  
Thomas E. Vermeer
Keyword(s):  
Audit Quality ◽  
Academic Research ◽  
Audit Firm ◽  
Quality Evidence

Do Individual Auditors Affect Audit Quality? Evidence from Archival Data

2013 ◽  
Vol 88 (6) ◽  
pp. 1993-2023 ◽  
Author(s):  
Ferdinand A. Gul ◽  
Donghui Wu ◽  
Zhifeng Yang
Keyword(s):  
Significant Variation ◽  
Audit Quality ◽  
Educational Background ◽  
Data Availability ◽  
Political Affiliation ◽  
Large Set ◽  
Audit Firm ◽  
Audit Firms ◽  
The Individual ◽  
Quality Evidence

ABSTRACT: We examine whether and how individual auditors affect audit outcomes using a large set of archival Chinese data. We analyze approximately 800 individual auditors and find that they exhibit significant variation in audit quality. The effects that individual auditors have on audit quality are both economically and statistically significant, and are pronounced in both large and small audit firms. We also find that the individual auditor effects on audit quality can be partially explained by auditor characteristics, such as educational background, Big N audit firm experience, rank in the audit firm, and political affiliation. Our findings highlight the importance of scrutinizing and understanding audit quality at the individual auditor level. Data Availability: Data used in this study are publicly available from the sources described herein.

Audit Firm Tenure and Audit Quality: Evidence from U.S. Firms

2013 ◽  
Author(s):  
Li Zheng Brooks ◽  
C.S. Agnes Cheng ◽  
Kenneth John Reichelt
Keyword(s):  
Audit Quality ◽  
Audit Firm ◽  
Quality Evidence

Fee Discounting and Audit Quality Following Audit Firm and Audit Partner Changes: Chinese Evidence

2014 ◽  
Vol 90 (4) ◽  
pp. 1517-1546 ◽  
Author(s):  
Hua-Wei Huang ◽  
K Raghunandan ◽  
Ting-Chiao Huang ◽  
Jeng-Ren Chiou
Keyword(s):  
Earnings Management ◽  
Audit Quality ◽  
Audit Fees ◽  
Audit Firm ◽  
Audit Fee ◽  
Significant Attention

ABSTRACT Issues related to low-balling of initial year audit fees and the resultant impact on audit quality have received significant attention from regulators in many countries. Using 9,684 observations from China during the years 2002–2011, we find that there is a significant initial year audit fee discount following an audit firm change when both of the signing audit partners are different from the prior year. The evidence is mixed if one or both of the signing partners from the prior year also moves with the client to the new audit firm. We find evidence of audit fee discounting in our analysis of fee levels, but not in our analysis of changes in audit fees from the prior year. Sanctions for problem audits and greater earnings management are more likely when there is an audit firm change that involves two new signing partners together with initial year audit fee discounting.

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