این مقاله علمی پژوهشی (ISI) به زبان انگلیسی از نشریه الزویر مربوط به سال ۲۰۲۲ دارای ۱۴ صفحه انگلیسی با فرمت PDF می باشد در ادامه این صفحه لینک دانلود رایگان مقاله انگلیسی و بخشی از ترجمه فارسی مقاله موجود می باشد.
کد محصول: h815
سال نشر: ۲۰۲۲
نام ناشر (پایگاه داده): الزویر
نام مجله: Advances in Accounting
نوع مقاله: علمی پژوهشی (Research articles)
تعداد صفحه انگلیسی: ۱۴ صفحه PDF
عنوان کامل فارسی:
مقاله انگلیسی ۲۰۲۲ :چرخش حسابرس، افشاء موضوعات کلیدی حسابرسی و کیفیت گزارشگری مالی
عنوان کامل انگلیسی:
Auditor rotation, key audit matter disclosures, and financial reporting quality
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Auditor rotation is believed to affect financial reporting quality partly because of the fresh views brought by new auditors. However, fresh views are generally unobservable and are often presumed. This study examines fresh views as evidenced by changes in key audit matters (KAMs) following auditor rotation. Using data from Taiwan, we find that different KAM disclosures are more likely to be observed when there is a change in audit partner(s) than when there is none. The identification of different KAMs provides evidence of the fresh perspective of the new auditors. We also examine the association between financial reporting quality and auditor rotation based on whether there is a change in KAM disclosures. We find that auditor rotation is not significantly associated with accruals quality when there is no change in KAMs after the rotation. Auditor rotation tends to affect accruals quality only when different KAMs are provided by the succeeding audit partners. This finding suggests that auditor rotation influences financial reporting quality under circumstances when auditors change their assessments of significant risk, as this can affect the audit plan and process, and accordingly affect the audit results.
Keywords: Key audit matters, Critical audit matters, Auditor rotation, Financial reporting quality
There is a long-running debate about whether long-term auditor–client relationships enhance or impair audit quality. Following rotation, a new auditor experiences a learning curve, which might negatively affect audit quality. On the other hand, the new auditor brings fresh views to the audit and to the client’s financial reporting practices. The new auditor may identify different critical issues with a fresh mind.
Despite the various rotation plans implemented at the auditor or audit firm level in different jurisdictions, empirical results regarding the association between auditor rotation and financial reporting quality are mixed and inconclusive.2 For example, based on various proxies of financial reporting quality, Hamilton, Ruddock, Stokes, and Taylor (2005), Firth, Rui, and Wu (2012a), Chi, Lisic, Long, and Wang (2013), Lennox, Wu, and Zhang (2014), Litt, Sharma, Simpson, and Tanyi (2014), and Laurion, Lawrence, and Ryans (2017) document a significant association between auditor rotation and financial reporting quality. However, the results from Chi, Huang, Liao, and Xie (2009), Kwon, Lim, and Simnett (2014), Kuang, Li, Sherwood, and Whited (2020), and Gipper, Hail, and Leuz (2021) indicate no significant effects of auditor rotation on audit quality…
Auditor rotation is believed to affect financial reporting quality partly because of the fresh view brought by new auditors. However, whether auditor rotation introduces fresh views has seldom been examined directly. In recent years, emphasis has been placed on improving communication of critical issues from auditors to financial statement users. As KAM disclosures become the norm, it is important to know whether this disclosure requirement is effective. This study uses changes in KAM disclosures as a proxy for a new auditor’s fresh perspective. We find that different KAM disclosures are more likely to be provided following voluntary but not mandatory auditor rotation. We also examine the association between auditor rotation and financial reporting quality by considering the implications of KAM changes. We argue that auditor rotation can affect financial reporting quality due to different judgments and decision-making processes made by different auditors. Auditor independence can also change and thereby affect auditor judgments. Accordingly, the effects of auditor rotation, if any, will be more pronounced when circumstances make the auditor’s judgment more critical and have a greater impact on the effectiveness of auditing. A change in KAM disclosures suggests a change in the assessed significant risks of clients and is viewed as one of these circumstances. Consistent with this argument, we find that the association between auditor rotation and financial reporting quality is more significant when there is a change in KAMs than when there is no change in KAMs…
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