Factors Affecting Auditor Change Decisions: The Case of United Kingdom

Dorine Mattar, Rim El Khoury and Melissa Chaanine

SAGE Open, 2024, vol. 14, issue 3, 21582440241259844

Abstract: This paper examines the impact of firms’ characteristics and corporate governance on the auditor change decisions using a logistic regression. The sample includes all U.K. companies listed on the London Stock Exchange that have changed their auditors between March 2013 and February 2018. The objectives are two-fold: (a) investigating the antecedents of audit change decision in general and (b) exploring the drivers of the decision to change auditors to a big 4. Results show that board independence, executive board members diversity and board members compensation are negatively related to auditor change decision, whereas return on assets and size are positively related to such decision. Moving to the second objective, results support the positive role of the company’s size in the choice of a big 4 auditor. The findings help stakeholders better understand the auditor change context prior to any strategic decision. Fruitful implications are highlighted too.

Keywords: auditor change; firms’ characteristics; corporate governance; Big N; logistic regression; UK (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:sae:sagope:v:14:y:2024:i:3:p:21582440241259844

DOI: 10.1177/21582440241259844

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