Get 20M+ Full-Text Papers For Less Than $1.50/day. Start a 14-Day Trial for You or Your Team.

Learn More →

Further evidence on mandatory partner rotation and audit pricing: a supply‐side perspective

Further evidence on mandatory partner rotation and audit pricing: a supply‐side perspective This study examines effects of mandatory partner rotation (MPR) on audit fees of Australian‐listed companies. Using a fee changes approach, evidence of fee increases in year of the MPR driven by smaller offices of non‐Big 4 auditors is found, consistent with supply‐side resource constraint arguments. Broadly consistent findings are observed using a fee levels approach. Appointment of inexperienced partners to MPR engagements has no discernible effect on fees. Additional analysis of audit reporting lag indicates fee increases reflect additional audit effort as opposed to a pricing strategy. Overall, the evidence supports recent moves by policy‐makers to soften MPR requirements. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Accounting & Finance Wiley

Further evidence on mandatory partner rotation and audit pricing: a supply‐side perspective

Loading next page...
 
/lp/wiley/further-evidence-on-mandatory-partner-rotation-and-audit-pricing-a-TMHp6Zcg8N

References (68)

Publisher
Wiley
Copyright
"Accounting and Finance © 2019 AFAANZ"
ISSN
0810-5391
eISSN
1467-629X
DOI
10.1111/acfi.12269
Publisher site
See Article on Publisher Site

Abstract

This study examines effects of mandatory partner rotation (MPR) on audit fees of Australian‐listed companies. Using a fee changes approach, evidence of fee increases in year of the MPR driven by smaller offices of non‐Big 4 auditors is found, consistent with supply‐side resource constraint arguments. Broadly consistent findings are observed using a fee levels approach. Appointment of inexperienced partners to MPR engagements has no discernible effect on fees. Additional analysis of audit reporting lag indicates fee increases reflect additional audit effort as opposed to a pricing strategy. Overall, the evidence supports recent moves by policy‐makers to soften MPR requirements.

Journal

Accounting & FinanceWiley

Published: Jun 1, 2019

Keywords: ; ; ; ;

There are no references for this article.