Perceived Audit Independence and Audit Market Structure

Lopez, Harold; Bonilla, Claudio A.

doi:10.2139/ssrn.3223639

SSRN Journal

2018

DOI: 10.2139/ssrn.3223639

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Perceived Audit Independence and Audit Market Structure

Harold Lopez

Claudio A. Bonilla

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2021

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Disciplining Role of Auditor Tenure and Mandatory Auditor Rotation

Dordzhieva¹

2021

The Accounting Review

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This study addresses the international debate over whether the rotation of audit firms should be mandatory. Mandatory rotation rules have been adopted by the European Union, but these rules have not been established in the United States. Proponents of the policy believe that a long-tenure auditor-client relationship leads to the auditor building an excessive economic bond with the client which may then erode auditor independence. Motivated by this claim, I build a theoretical model that compares auditor incentives to issue independent reports under regimes with and without mandatory rotation. The model demonstrates conditions under which mandatory rotation could actually impair auditor independence, contrary to the popular view.

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Disciplining Role of Auditor Tenure and Mandatory Auditor Rotation

Dordzhieva¹

2021

The Accounting Review

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show abstract

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Perceived Audit Independence and Audit Market Structure

Cited by 1 publication

References 22 publications

Disciplining Role of Auditor Tenure and Mandatory Auditor Rotation

Disciplining Role of Auditor Tenure and Mandatory Auditor Rotation

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