Does Mandatory Rotation of Audit Partners Improve Audit Quality
Does Mandatory Rotation of Audit Partners Improve Audit Quality
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DOI：
10.2308/accr-50800
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发表时间：
2014-04
期刊：
影响因子：
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通讯作者：
C. Lennox;Xi Wu;Tianyu Zhang
中科院分区：
文献类型：
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作者：
C. Lennox;Xi Wu;Tianyu Zhang
摘要：强制轮换的反对者认为，合伙人的变更对审计质量有害，因为这会导致特定客户知识的流失。另一方面，支持者认为合伙人的变更是有益的，因为它会产生积极的同行评审效应以及对审计的新视角。我们使用中国审计调整的独特数据集来检验强制合伙人轮换对审计质量的影响。我们的研究结果表明，在轮换前后的几年里，项目合伙人的强制轮换会带来更高质量的审计。具体而言，我们发现在强制轮换前即将离任的合伙人任期的最后一年以及强制轮换后新入职合伙人任期的第一年，审计调整的频率显著提高。
ABSTRACT: Opponents of mandatory rotation argue that a change of partner is bad for audit quality, as it results in a loss of client-specific knowledge. On the other hand, proponents argue that a change of partner is beneficial, as it results in a positive peer review effect and a fresh perspective on the audit. We test the impact of mandatory partner rotation on audit quality using a unique dataset of audit adjustments in China. Our results suggest that mandatory rotation of engagement partners results in higher quality audits in the years immediately surrounding rotation. Specifically, we find a significantly higher frequency of audit adjustments during the departing partner's final year of tenure prior to mandatory rotation and during the incoming partner's first year of tenure following mandatory rotation.