External rotation of the auditor

Patrick Velte

Metrika: International Journal for Theoretical and Applied Statistics, 2012, vol. 23, issue 1, 91 pages

Abstract: The European Commission (EC) discusses in her regulation draft of 2011 the external mandatory auditor rotation (audit firm rotation) principally after six years as a reform measure to increase auditor independence, which could complement the internal mandatory rotation (auditor rotation) by the 8th EC directive of 2006. First, the present short survey paper contains a theoretical foundation of audit firm rotation, whereby the influences on low balling will be discussed. Furthermore, the paper gives a review of the empirical auditor change research. In contrast to the perception of the EC, the empirical results mainly don’t state an increased financial accounting and audit quality by an external rotation of the auditor. Copyright Springer Verlag 2012

Keywords: Empirical auditor change research; Low balling; Audit quality; Earnings management (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:spr:metrik:v:23:y:2012:i:1:p:81-91

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DOI: 10.1007/s00187-012-0149-8

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