2012
DOI: 10.2308/ajpt-10193
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An Examination of Partner Perceptions of Partner Rotation: Direct and Indirect Consequences to Audit Quality

Abstract: SUMMARY Using structured interviews and surveys of practicing audit partners, this study examines their perceptions with regard to mandatory partner rotation and cooling-off periods, and how recently enacted, more stringent rules, may negatively impact auditors' quality of life to the detriment of audit quality. Results suggest rotation, in general, increases partners' workloads and the likelihood of relocation. Additionally, results suggest that in response to accelerated rotation (and an exten… Show more

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Cited by 113 publications
(119 citation statements)
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References 27 publications
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“…When a partner is to be rotated, increased accountability may arise from having a new partner in charge but the focus of that accountability could shift to smoothly managing the transition from one partner to the next so as to not disrupt the auditor-client relationship (Daugherty et al, 2012). When a partner is to be rotated, increased accountability may arise from having a new partner in charge but the focus of that accountability could shift to smoothly managing the transition from one partner to the next so as to not disrupt the auditor-client relationship (Daugherty et al, 2012).…”
Section: Regulation and Accountabilitymentioning
confidence: 99%
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“…When a partner is to be rotated, increased accountability may arise from having a new partner in charge but the focus of that accountability could shift to smoothly managing the transition from one partner to the next so as to not disrupt the auditor-client relationship (Daugherty et al, 2012). When a partner is to be rotated, increased accountability may arise from having a new partner in charge but the focus of that accountability could shift to smoothly managing the transition from one partner to the next so as to not disrupt the auditor-client relationship (Daugherty et al, 2012).…”
Section: Regulation and Accountabilitymentioning
confidence: 99%
“…Audits are subject to greater scrutiny than in the past. Further, the requirement to rotate audit partners to enhance independence is creating challenges for audit firms as it has the potential to disrupt the conduct of an audit and detrimentally impact knowledge of a client (Daugherty et al, 2012). Inspections (PCAOB, 2012;ASIC, 2014) are having an effect on various measures of audit quality (Gramling et al, 2011;Lamoreaux, 2013) because inspectors have access to auditors' files and can hold those auditors accountable for their work (Peecher et al, 2013;Johnson et al, 2014).…”
Section: Introductionmentioning
confidence: 99%
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“…Rotation across office sizes is a topic that has rarely been examined in prior studies, due to the lack of rotation data. This is because audit partners in private sector prefer to learn a new industry rather than being rotated through other offices (Daugherty et al 2012). In contrast, in the Audit Board of Republic of Indonesia (BPK RI), mandatory auditor rotation is performed across different office sizes.…”
Section: Introductionmentioning
confidence: 98%
“…Second, the audit partners' new clients may be in a different industry to their previous clients, similar to a vertical promoted HRO in this study. The audit partners' preferences to learn a new industry instead of rotating to other offices have been documented by Daugherty et al (2012). Therefore, these audit partners also experience the negative effect of auditor rotation.…”
Section: Deltaaf It = β 0 + β 1 Officesize It + β 2 Rotation It + mentioning
confidence: 99%