The impact of auditor rotation on auditor–client negotiation

Mandatory audit firm rotation and prohibition of audit firm‐provided tax services: Evidence from investment consultants’ perceptions

“…Although experiments might be an effective tool for investigating the effects induced by mandatory audit-firm versus audit-partner rotation, little experimental research has thus far focused on the impact of the rotation system. Some experimental studies have investigated the impact of audit-firm rotation on factual independence or factual audit quality, mostly finding a positive impact (e.g., Arel, Brody, & Pany, 2006;Bowlin, Hobson, & Piercey, 2015;Dopuch, King, & Schwartz, 2001;Hatfield, Jackson, & Vandervelde, 2011;Kemp, Reckers, & Arrington, 1983;Wang & Tuttle, 2009). Gates, Lowe, and Reckers (2007), from an experiment with MBA and law students at a topranked metropolitan university in the USA, reported that audit-firm rotation increases confidence in reported earnings.…”

Negotiating a Fair Value under Accounting Uncertainty: A Laboratory Experiment

“…They find a strong result for the difference between the multi-period games and the one-period ͑ultimatum͒ games, showing more disagreements in the one-period games, and a weak result for the predicted effect of payoff uncertainty. Although this is the only prior study comparing multi-period and one-period games for the frequency of agreement/disagreement, their findings are consistent with a substantial amount of experimental evidence showing that in multi-period games players improve their expectations of their opponents' behavior and use experience to adapt to the game setting ͑e.g., Harrison 1990;Roth et al 1991;Mitzkewitz and Nagel 1993;Hoffman et al 1994;Harrison and McCabe 1996;Suleiman 1996;Slonim and Roth 1998;Zwick and Chen1999;Hoffman et al 2000;Rutström and Williams 2000;Wang and Tuttle 2009͒. Learning or game experience resulting in more agreements in multi-period games can be explained by the following strategic interactions between the offering party and the responding party: the offering party makes a better offer after the responding party rejected a lower offer in the previous period ͑the responding party thus holds a credible threat of rejecting a similar offer in the current period͒, and/or the responding party realizes that the consequence of making another rejection is only to lose more, given that the offer, unsatisfactory as it may be, is still mutually beneficial. In contrast, bargainers in one-period games may want to take chances with different individuals as their opponents.…”

Gobierno corporativo y factores determinantes del cambio de firma auditora en la gran empresa española

“…Por un lado, una prolongada relación puede menoscabar la independencia del auditor (Francis, 2004;Mautz y Sharaf, 1961), aumentar su rutina e, incluso, favorecer la compra de opinión . Por otra parte, el cambio de auditor genera unos costes de aprendizaje y experiencia, destruye activos específi cos de esa relación y plantea la duda en torno a la posible contratación inefi ciente del próximo auditor (Arruñada y Paz, 1997;Wang y Tuttle, 2009). A ese debate, principalmente académico, hay que añadir una visión más política del cambio de auditor que recomienda proceder a su renovación para evitar una eventual connivencia con la empresa auditada, colisionando con -al menos una parte-de la evidencia empírica de origen académico.…”