Mandatory audit firm rotation in Spain: a policy that was never applied

Carrera, Nieves; Aguilar, Nieves Gómez; Humphrey, Christopher; Ruiz‐Barbadillo, Emiliano

doi:10.1108/09513570710779009

Cited by 22 publications

(15 citation statements)

References 39 publications

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“…Dengan kata lain sebenarnya negosiasi tersebut akan menghasilkan konsesi resiprokal yang pada ujungnya sudah mengarah pada opini apa yang nantinya akan dikeluarkan, padahal pekerjaan audit belum dilakukan. Boon et al (2008) Carrera et al (2007) menemukan bukti dari surveynya bahwa lebih dari separo negosiasi auditor-klien sangat mempengaruhi kualitas laporan auditan. Berarti secara tidak langsung tindakan tidak etis dari proses negosiasi akan mereduksi kualitas auditor dalam membuat opini atas laporan keuangan klien.…”

Section: Profesionalisme Audit (Kualitas Auditor)unclassified

Pengaruh Fee Audit, Rotasi Kap, Dan Reputasi Auditor Terhadap Kualitas Audit Di Bursa Efek Indonesia

Hartadi¹

2012

EKUITAS

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Section: Profesionalisme Audit (Kualitas Auditor)unclassified

Pengaruh Fee Audit, Rotasi Kap, Dan Reputasi Auditor Terhadap Kualitas Audit Di Bursa Efek Indonesia

Hartadi¹

2012

EKUITAS

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“…Carrera et al (2007) asserted that abolishing MAFR in Spain was a politicized process. Thus, Spanish regulators are reconsidering whether a case exists to re-establish the MAFR requirement.…”

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confidence: 99%

Mandatory Audit Firm Rotation and Audit Quality

Kim¹,

Lee²,

Lee³

2015

JABR

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Recently, regulators and policy makers who witnessed the global financial crisis during 20072009 began considering a variety of ways to enhance auditor independence and financial reporting quality, ultimately aiming at investor protection. Since the enactment of the SarbanesOxley Act of 2002 (SOX), the Mandatory Audit Firm Rotation (MAFR) requirement has once again received significant attention from regulators and policy makers around the world, including the European Union (EU) and the U.S. Public Companies Accounting Oversight Board (PCAOB). In this paper, we investigate whether MAFR enhances audit quality in Korea. We find that under MAFR, newly rotated auditors are more likely to issue first-time going-concern audit opinions to financially distressed firms during their initial (first-year) financial statement audit compared with under the Voluntary Audit Firm Change (VAFC). Moreover, firms audited by mandatorily rotated new auditors have less discretionary accruals and higher accrual quality than those audited by voluntarily switched new auditors during the initial audit engagement. These results of earnings quality are more pronounced for firms that received a first-time going-concern audit opinion during the initial financial statement audit under MAFR. Taken together, the findings suggest that MAFR produces better audit quality than the VAFC. Further, our study provides implications for regulators and policy makers of countries considering the adoption of MAFR.

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“…23. However, it has been argued by Carrera et al (2007) and Ruiz-Barbadillo et al (2009) that the mandatory regulations were not enforced. 24.…”

Section: Discussionmentioning

confidence: 99%

Auditor Independence and Auditor Bargaining Power: Some Spanish Evidence Concerning Audit Error in the Going Concern Decision

Barnes

Renart

2013

Int J Auditing

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It is well known that where an auditor's relative bargaining power is high, this may help its independence and prevent a Type II error (no qualification but corporate failure). It is less well known that this may also lead to a lack of independence in the form of over‐conservatism and an unjustified inclination by an auditor to qualify to protect its reputation leading to a Type I error (a qualification but no corporate failure). We therefore hypothesize that there is a positive relationship between the auditor's relative bargaining power and Type I errors (‘’) and a negative relationship between it and Type II errors (‘’). The empirical study supports but rejects . Taken together, these results suggest that Spanish auditors have a high propensity to qualify to protect their reputation, undeterred by pressure from client companies, in order to protect their reputation – ‘over‐conservatism’ as we have called it.

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Mandatory audit firm rotation in Spain: a policy that was never applied

Cited by 22 publications

References 39 publications

Pengaruh Fee Audit, Rotasi Kap, Dan Reputasi Auditor Terhadap Kualitas Audit Di Bursa Efek Indonesia

Pengaruh Fee Audit, Rotasi Kap, Dan Reputasi Auditor Terhadap Kualitas Audit Di Bursa Efek Indonesia

Mandatory Audit Firm Rotation and Audit Quality

Auditor Independence and Auditor Bargaining Power: Some Spanish Evidence Concerning Audit Error in the Going Concern Decision

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