Audit tenure and audit qualifications in a low litigation risk setting: an analysis of the spanish market
The main role of the external auditor in the classical corporate governance scheme is to verify the accounting information provided by the firms’ managers. Lengthy audit engagements are viewed as a main threat to preserve auditor independence, and therefore regulators have established mandatory rota...
| Autores: | , |
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| Tipo de recurso: | artículo |
| Estado: | Versión publicada |
| Fecha de publicación: | 2013 |
| País: | España |
| Institución: | Varias* (Consorci de Biblioteques Universitáries de Catalunya, Centre de Serveis Científics i Acadèmics de Catalunya) |
| Repositorio: | Recercat. Dipósit de la Recerca de Catalunya |
| OAI Identifier: | oai:recercat.cat:20.500.14342/1033 |
| Acceso en línea: | http://hdl.handle.net/20.500.14342/1033 https://doi.org/10.4067/s0718-52862013000200002 |
| Access Level: | acceso abierto |
| Palabra clave: | Auditoria--Espanya Control de qualitat--Auditoria Auditor independence Qualified opinion Auditor tenure Audit quality 336 |
| Sumario: | The main role of the external auditor in the classical corporate governance scheme is to verify the accounting information provided by the firms’ managers. Lengthy audit engagements are viewed as a main threat to preserve auditor independence, and therefore regulators have established mandatory rotation rules in many countries worldwide. Researchers, however, have addressed the analysis of audit independence mainly by evaluating the role of the auditor not as an accounting verifier but as a substitute of bankruptcy prediction models. Our results show that the likelihood of audit qualifications decreases with audit tenure. This result is robust to the inclusion in the model of a proxy of accounting quality. Therefore, the potential explanation for this finding based on higher accounting quality associated to lengthy audit engagements is rejected. This threat to the independence of the external auditor has not been considered in the mandatory rotation rules established in most countries that only requires the rotation of the audit partner. |
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