Access the full text.
Sign up today, get DeepDyve free for 14 days.
Lauren Reid, Joseph Carcello (2017)
Investor Reaction to the Prospect of Mandatory Audit Firm RotationThe Accounting Review, 92
F. Choudhury (2017)
The international federation of accountants (IFAC) response to the IRBA consultation paper
B. DiCicco-Bloom, B. Crabtree (2006)
The qualitative research interviewMedical Education, 40
Michael Harber, B. Marx, P. Jager (2020)
The perceived financial effects of mandatory audit firm rotationJournal of International Financial Management and Accounting, 31
B. Malsch, Y. Gendron (2011)
Reining in auditors: On the dynamics of power surrounding an “innovation†in the regulatory spaceFuel and Energy Abstracts
B. Daniels, Q. Booker (2011)
The effects of audit firm rotation on perceived auditor independence and audit qualityResearch in Accounting Regulation, 23
Emiliano Ruiz-Barbadillo, Nieves Go´mez‐Aguilar, Nieves Carrera (2009)
Does Mandatory Audit Firm Rotation Enhance Auditor Independence? Evidence from SpainEar and Hearing, 28
Kathryn Kadous, S. Kennedy, Mark Peecher (2003)
The Effect of Quality Assessment and Directional Goal Commitment on Auditors' Acceptance of Client‐Preferred Accounting MethodsThe Accounting Review, 78
A. Schneider, William Messier (2007)
Engagement quality review: insights from the academic literatureManagerial Auditing Journal, 22
L. Brooks, C. Cheng, Kenneth Reichelt (2012)
Audit Firm Tenure and Audit Quality: Evidence from U.S. FirmsSPGMI: Compustat Fundamentals (Topic)
(1987)
An investigation of the impact of economic and organizational factors on auditor independence
D. Deis, Gary Giroux (1996)
The effect of auditor changes on audit fees, audit hours, and audit qualityJournal of Accounting and Public Policy, 15
Michael Harber, W. Maroun (2020)
Mandatory audit firm rotation: a critical composition of practitioner views from an emerging economyManagerial Auditing Journal
Contemporary Accounting Research, 26
E. Bamber, V. Iyer (2005)
Auditors' Identification with Their Clients and its Effect on Auditors' ObjectivityBehavioral & Experimental Accounting
Steven Thornburg, R. Roberts (2013)
In whose interest? A critical examination of public interest appeals made by the public accounting profession in the USAInternational Journal of Critical Accounting, 5
D. Hay (2015)
The Frontiers of Auditing ResearchSPGMI: Compustat Fundamentals (Topic)
Vineeta Sharma, D. Sharma, Umapathy Ananthanarayanan (2011)
Client Importance and Earnings Management: The Moderating Role of Audit CommitteesAuditing-a Journal of Practice & Theory, 30
C. Villiers, John Dumay, W. Maroun (2019)
Qualitative Accounting Research: Dispelling Myths and Developing a New Research AgendaThe University of Auckland Business School Research Paper Series
(2009)
International Standard on Quality Control 1 (ISQC 1)
Sylvain Durocher, Y. Gendron (2014)
Epistemic commitment and cognitive disunity toward fair-value accountingAccounting and Business Research, 44
J. Dillard (2011)
Double Loop Learning; or, Just Another Service to Sell: A Comment on “The Case of Sustainability Assurance: Constructing a New Assurance Service”*Contemporary Accounting Research, 28
M. Power (2003)
Auditing and the production of legitimacyAccounting Organizations and Society, 28
Jennifer Blouin, B. Grein, Brian Rountree (2007)
An Analysis of Forced Auditor Change: The Case of Former Arthur Andersen ClientsThe Accounting Review, 82
James Myers, Linda Myers, Thomas Omer (2003)
Exploring the Term of the Auditor‐Client Relationship and the Quality of Earnings: A Case for Mandatory Auditor Rotation?The Accounting Review, 78
Jere Francis (2004)
What do we know about audit qualityBritish Accounting Review, 36
Richard Fontaine, Hanen Khemakhem, David Herda (2016)
Audit committee perspectives on mandatory audit firm rotation: evidence from CanadaJournal of Management & Governance, 20
Audrey Gramling, Jayanth Krishnan, Yinqi Zhang (2011)
Are PCAOB-Identified Audit Deficiencies Associated with a Change in Reporting Decisions of Triennially Inspected Audit Firms?Auditing-a Journal of Practice & Theory, 30
Albert Nagy (2005)
Mandatory Audit Firm Turnover, Financial Reporting Quality, and Client Bargaining Power: The Case of Arthur AndersenAccounting Horizons, 19
What changes, if any, do you foresee the audit firms implementing in response to MAFR?
The Big Four may be blocked from doing Indian audits for years to come
Michael Favere-Marchesi, Craig Emby (2018)
The Alumni Effect and Professional Skepticism: An Experimental InvestigationAccounting Horizons, 32
R. Quick, Florian Schmidt (2018)
Do audit firm rotation, auditor retention, and joint audits matter? – An experimental investigation of bank directors' and institutional investors' perceptionsJournal of Accounting Literature
Gazetted Rule of Mandatory Audit Firm Rotation -Gazette No. 40888. The Independent Regulatory Board for Auditors
P. Carey, R. Simnett (2006)
Audit Partner Tenure and Audit QualityThe Accounting Review, 81
Sunhwa Choi, Y. Choi, F. Gul, Woo‐Jong Lee (2015)
The impact of mandatory versus voluntary auditor switches on stock liquidity: Some Korean evidenceBritish Accounting Review, 47
P. Sikka (2009)
Financial Crisis and the Silence of the AuditorsAccounting Organizations and Society, 34
R. Simnett, Elizabeth Carson, A. Vanstraelen (2016)
International Archival Auditing and Assurance Research: Trends, Methodological Issues, and OpportunitiesAuditing-a Journal of Practice & Theory, 35
K. Kadous, Y. Zhou (2018)
How does intrinsic motivation improve auditor skepticism in complex audit tasks
Karl Wang, Brad Tuttle (2009)
The impact of auditor rotation on auditor–client negotiationAccounting Organizations and Society, 34
R. Hussey, George Lan (2001)
An Examination of Auditor Independence Issues from the Perspectives of U.K. Finance DirectorsJournal of Business Ethics, 32
(2008)
The Companies Act , 2008 ( No 71 of 2008 )
Corinna Ewelt-Knauer, A. Gold, Christiane Pott (2013)
Mandatory Audit Firm Rotation: A Review of Stakeholder Perspectives and Prior ResearchAccounting in Europe, 10
Kathryn Epps, William Messier (2007)
Engagement Quality Reviews: A Comparison of Audit Firm PracticesEar and Hearing, 26
F. Ball, J. Tyler, P. Wells (2015)
Is audit quality impacted by auditor relationshipsJournal of Contemporary Accounting & Economics, 11
Thomas Lee (1995)
The professionalization of accountancyAccounting, Auditing & Accountability Journal, 8
South African Parliament: Standing Committee on Finance. Mandatory Audit Firm Rotation: Public hearings. Minutes dated 17
Allen Blay (2005)
Independence Threats, Litigation Risk, and the Auditor's Decision ProcessContemporary Accounting Research, 22
What further or final implications do you perceive MAFR will have on audit quality in South Africa?
Klaus Ruhnke, Martin Schmidt (2014)
The audit expectation gap: existence, causes, and the impact of changesAccounting and Business Research, 44
R. Hurtt, Helen Brown-Liburd, Christine Earley, G. Krishnamoorthy (2013)
Research on Auditor Professional Skepticism: Literature Synthesis and Opportunities for Future ResearchAuditing-a Journal of Practice & Theory, 32
(2018)
Corrospondent: who guards the guards? The relevance of auditors in a post-financial scandal world
Kimberly Westermann, Jeffrey Cohen, Gregory Trompeter (2019)
PCAOB Inspections: Public Accounting Firms on “Trial”Contemporary Accounting Research
Guy Fernando, Ahmed Abdel-Meguid, Randal Elder (2010)
Audit quality attributes, client size and cost of equity capitalReview of Accounting and Finance, 9
L. DeAngelo (1981)
Auditor size and audit qualityJournal of Accounting and Economics, 3
A. Tashakkori, J. Creswell (2007)
Editorial: The New Era of Mixed MethodsJournal of Mixed Methods Research, 1
(2018)
Reforming the big four – shape up, not break up
W. Maroun (2018)
Modifying assurance practices to meet the needs of integrated reporting: The case for “interpretive assurance”Accounting, Auditing & Accountability Journal, 31
C. Humphrey, Peter Moizer, S. Turley (1992)
The audit expectations gap—plus ca change, plus c'est la meme chose?Critical Perspectives on Accounting, 3
K. Chan, Kenny Lin, Ray Wang (2012)
Government Ownership, Accounting-Based Regulations, and the Pursuit of Favorable Audit Opinions: Evidence from ChinaAuditing-a Journal of Practice & Theory, 31
Dear Seymour (2011)
Concept Release on Auditor Independence and Audit Firm Rotation
L. Williams, W. Wilder (2017)
Audit Firm Perspective on Audit Firm Rotation and Enhancing Independence: Evidence from PCAOB Comment LettersCurrent Issues in Auditing, 11
Brian Daugherty, Denise Dickins, Richard Hatfield, J. Higgs (2012)
An Examination of Partner Perceptions of Partner Rotation: Direct and Indirect Consequences to Audit QualityAuditing-a Journal of Practice & Theory, 31
Comment on the impact of MAFR on the public's perception of the audit industry
L. Davis, Billy Soo, Gregory Trompeter (2007)
Auditor Tenure and the Ability to Meet or Beat Earnings ForecastsOrganizations & Markets eJournal
Ewald Aschauer, R. Quick (2018)
Mandatory Audit Firm Rotation and Prohibition of Audit Firm‐Provided Tax Services: Evidence from Investment Consultants’ PerceptionsAuditing
(2014)
A framework for audit quality: Key elements that create an environment for audit quality
Will MAFR affect the performance of audit engagements in any way? (resources, staff, the extent of monitoring, supervision and review
(2009)
The Causes and Consequences of Auditor Switching : A Review of the Literature
N. Dai, Clinton Free, Y. Gendron (2019)
Interview-based research in accounting 2000–2014: Informal norms, translation and vibrancyManagement Accounting Research
L. Quam (1998)
The Audit Society: Rituals of VerificationBMJ, 316
M. Cameran, A. Prencipe, Marco Trombetta (2016)
Mandatory Audit Firm Rotation and Audit QualityEuropean Accounting Review, 25
C. Lennox (2012)
Auditor tenure and rotation
Brendan O’Dwyer, D. Owen, Jeffrey Uneman (2011)
Seeking Legitimacy for New Assurance Forms: The Case of Assurance on Sustainability ReportingCorporate Social Responsibility (CSR) eJournal
M. Nelson (2009)
A Model and Literature Review of Professional Skepticism in AuditingEar and Hearing, 28
王彦西 (2014)
Discussion on "The professionalization of accountancy --A history of protecting the public interest in a self-interested way
The New York Times (2014)
Holding auditors blameless
M. Cameran, Jere Francis, Antonio Marra, Angela Pettinicchio (2013)
Are There Adverse Consequences of Mandatory Auditor Rotation? Evidence from the Italian ExperienceCGN: Gatekeepers (Topic)
Lukas Löhlein (2016)
From Peer Review to PCAOB Inspections: Regulating for Audit Quality in the U.S.Social Science Research Network
W. Knechel (2016)
Audit Quality and RegulationWiley-Blackwell: International Journal of Auditing
S. Corbella, C. Florio, G. Gotti, Stacy Mastrolia (2015)
Audit firm rotation, audit fees and audit quality: The experience of Italian public companiesJournal of International Accounting, Auditing and Taxation, 25
(2019)
Exposure Draft: Proposed International Standard on Quality Management 1 (Previously International Standard on Quality Control 1)
Jeong‐Bon Kim, Cheong Yi (2009)
Does auditor designation by the regulatory authority improve audit quality? Evidence from KoreaJournal of Accounting and Public Policy, 28
Adelheid Saldern (2002)
The Challenge of Modernity
Chih-Ying Chen, Chan-Jane Lin, Yu-Chen Lin (2008)
Audit partner tenure, audit firm tenure, and discretionary accruals: Does long auditor tenure impair earnings quality?Contemporary Accounting Research, 25
C. Dearnley (2005)
A reflection on the use of semi-structured interviews.Nurse researcher, 13 1
C. Humphrey (2008)
Auditing research: a review across the disciplinary divideAccounting, Auditing & Accountability Journal, 21
Jeffrey Casterella, Derek Johnston (2013)
Can the Academic Literature Contribute to the Debate over Mandatory Audit Firm Rotation?Auditing
Karla Zehms, J. Bedard (2001)
Engagement Planning, Bid Pricing, and Client Response in the Market for Initial Attest EngagementsAuditing
Tony Soteriou, G. Hek, S. Gray (2005)
Patient confidentiality, clinical data and NHS research - a researcher's guide.Nurse researcher, 13 2
D. Mali, Hyoung-joo Lim (2018)
Conservative reporting and the incremental effect of mandatory audit firm rotation policy: a comparative analysis of audit partner rotation vs audit firm rotation in South KoreaAustralian Accounting Review, 28
Felix Lessambo (2018)
The International Auditing and Assurance Standards Board
Jeffrey Unerman, Brendan O’Dwyer (2004)
Enron, WorldCom, Andersen et al.: a challenge to modernityCritical Perspectives on Accounting, 15
Moez Bennouri, Mehdi Nekhili, P. Touron (2011)
Does Auditors' Reputation 'Discourage' Related-Party Transactions? The French CaseAuditing-a Journal of Practice & Theory, 34
(2018)
Public Inspections Report 2017
Joanne Horton, Maria Tsipouridou, A. Wood (2017)
European Market Reaction to Audit ReformsEuropean Accounting Review, 27
Mark Defond, Jieying Zhang (2014)
A Review of Archival Auditing ResearchERN: Regulation (IO) (Topic)
In comparison to the current system of mandatory partner rotation, do you believe MAFR will achieve its primary objective of preserving or improving audit quality? Please explain
A. Loft, C. Humphrey, S. Turley (2006)
In Pursuit of Global Regulation: Changing Governance and Accountability Structures at the International Federation of Accountants (IFAC)Accounting, Auditing & Accountability Journal, 19
Thomas Calderon, Li Wang, Thomas Klenotic (2012)
Past control risk and current audit feesManagerial Auditing Journal, 27
Please comment on your view concerning the primary argument against MAFR (namely, that the incoming audit firm is comparatively less familiar with the client's business)
(2016)
The World Economic Forum Global Competitiveness Report 2016-2017
(2016)
The IRBA Consultation Paper
(2019)
Big four accountancy firms should break up, say MPs
Jere Francis (2011)
A Framework for Understanding and Researching Audit QualityAuditing-a Journal of Practice & Theory, 30
Auditing: A Journal of Practice and Theory, 32
Joanne Horton, G. Livne, Angela Pettinicchio (2020)
Empirical Evidence on Audit Quality under a Dual Mandatory Auditor Rotation RuleEuropean Accounting Review, 30
P. Trivellas, Zoe Akrivouli, Evdokia Tsifora, Paraskevi Tsoutsa (2015)
The Impact of Knowledge Sharing Culture on Job Satisfaction in Accounting Firms. The Mediating Effect of General CompetenciesProcedia. Economics and finance, 19
Aaron Wilson, Casey McNellis, C. Latham (2018)
Audit Firm Tenure, Auditor Familiarity, and Trust: Effect on Auditee Whistleblowing Reporting IntentionsResearch Methods & Methodology in Accounting eJournal
Rihab Khalifa, Nina Sharma, C. Humphrey, K. Robson (2007)
Discourse and audit change: Transformations in methodology in the professional audit fieldAccounting, Auditing & Accountability Journal, 20
Auditing: A Journal of Practice and Theory, 34
(1996)
Auctions for Audit Services and Low-Balling
J. Black (2008)
Forms and Paradoxes of Principles Based RegulationCapital Markets Law Journal, 3
(2018)
How does intrinsic motivation improve auditor skepticism in complex audit tasks. Available at SSRN: https://ssrn.com/abstract=2576984 or http://dx.doi.org/10.2139/ssrn.2576984
Journal of Accounting Literature, 36
J. Baxter, C. Boedker, W. Chua (2008)
The future(s) of interpretive accounting research—A polyphonic response from beyond the metropolisCritical Perspectives on Accounting, 19
(2018)
The great expectations gap. What is an audit for?
W. Maroun, J. Atkins (2014)
Whistle-blowing by external auditors in South Africa: Enclosure, efficient bodies and disciplinary powerAccounting, Auditing & Accountability Journal, 27
Auditing: A Journal of Practice and Theory, 26
(2006)
Financial Reporting Council - Discussion Paper: Promoting Audit Quality
Constantinos Caramanis, C. Lennox (2008)
Audit effort and earnings managementJournal of Accounting and Economics, 45
(2018)
International Ethics Standards Board for Accountants (IESBA), International Code of Ethics for Professional Accountants, 2018 edition
Please describe what you understand as the purpose of the IRBA in pursuing MAFR regulation in South Africa
(2016)
The King IV Report on Corporate Governance for South Africa
PCAOB (2011)
Comment letter Re: PCAOB rulemaking docket matter no. 37: concept release on auditor independence and audit firm rotation
Elizabeth Carson, R. Simnett, Billy Soo, A. Wright (2012)
Changes in Audit Market Competition and the Big N PremiumIO: Regulation
Justin Logie, W. Maroun (2020)
Evaluating Audit Quality Using the Results of Inspection Processes Performed by an Independent RegulatorAustralian Accounting Review
James Smith, Thomas Kida (1991)
Heuristics and biases: Expertise and task realism in auditing.Psychological Bulletin, 109
S. Kwon, Youngdeok Lim, R. Simnett (2014)
The Effect of Mandatory Audit Firm Rotation on Audit Quality and Audit Fees: Empirical Evidence from the Korean Audit MarketEmerging Markets Economics: Firm Behavior & Microeconomic Issues eJournal
R. Houston (1999)
The Effects of Fee Pressure and Client Risk on Audit Seniors' Time Budget DecisionsEar and Hearing, 18
Pamela Roush, Bryan Church, J. Jenkins, Susan McCracken, Jonathan Stanley (2011)
Auditor Rotation: The PCAOB Considers a New DirectionCurrent Issues in Auditing, 5
Nopmanee Tepalagul, Lingzi Lin (2015)
Auditor Independence and Audit QualityJournal of Accounting, Auditing & Finance, 30
Kathryn Kadous, Yuepin Zhou (2018)
How Does Intrinsic Motivation Improve Auditor Judgment in Complex Audit Tasks?Contemporary Accounting Research
(2014)
Directorate-General for Financial Stability, EU audit reform
Masooma Javed, Rifat Balouch, Fatimah Hassan (2014)
Determinants of Job Satisfaction and its Impact on Employee Performance and Turnover IntentionsInternational Journal of Learning and Development, 4
This paper explores how technical constructions of audit practice are influenced by mandatory audit firm rotation (MAFR) regulations. The paper responds to calls for additional research on how external regulation influences audit quality and supplements the predominately quantitative research dealing specifically with firm rotation and its relevance for audit quality.Design/methodology/approachData are collected from South Africa which is the latest jurisdiction to adopt MAFR (from 2017). Detailed interviews with 49 participants comprising 24 audit partners and 25 non-auditors are conducted to explore how MAFR can impact audit quality. For this purpose, audit quality is defined according to a schematic developed interpretively and based on professional auditing standards and the prior research on audit quality.FindingsThere is no guarantee that MAFR will bolster auditors' independence or contribute to a more thorough audit approach. On the contrary, the effort required by incoming audit firms to gain an understanding of new clients coupled with material tendering costs is expected to decrease the profitability of audit engagements with adverse implications for audit quality. A loss of client experience and staff retention challenges may contribute further to a decline in audit quality. There may be some improvements to audit practice when an incumbent firm's work is going to be scrutinised by a new auditor but audit methodologies, including the nature and extent of testing performed, are not expected to change significantly because of MAFR. In this way, the regulation may be a symbolic response to a perceived decline in audit quality and auditor independence rather than part of an effective strategy to encourage more rigorous audit practice for the benefit of the users of financial statements.Originality/valueThe current paper provides one of the first exploratory accountants of how MAFR is expected to impact audit practice and, in turn, audit quality. The research responds to the call for more field-work studies on the mechanics of the audit process by engaging directly with practitioners instead of relying on inferential testing of broad audit quality surrogates. The study also makes an important empirical contribution by providing primary evidence on how external regulation influences audit practice from a seldom studied African perspective.
Journal of Accounting in Emerging Economies – Emerald Publishing
Published: May 31, 2021
Keywords: Mandatory audit firm rotation; Auditor independence; Audit tenure; Audit quality; Auditing
Read and print from thousands of top scholarly journals.
Already have an account? Log in
Bookmark this article. You can see your Bookmarks on your DeepDyve Library.
To save an article, log in first, or sign up for a DeepDyve account if you don’t already have one.
Copy and paste the desired citation format or use the link below to download a file formatted for EndNote
Access the full text.
Sign up today, get DeepDyve free for 14 days.
All DeepDyve websites use cookies to improve your online experience. They were placed on your computer when you launched this website. You can change your cookie settings through your browser.