Impact of Auditor and Audit Firm Rotation on Accounting and Audit Quality: A Critical Analysis of the EC Regulation Draft

Publikation: Beiträge in ZeitschriftenZeitschriftenaufsätzeForschungbegutachtet

Authors

In a current regulation draft of 2011, the European Commission (EC) plans the mandatory audit firm rotation principally after six years and with regard to a cooling off period of four years to
increase auditor independence. This could complement the internal mandatory rotation (auditor rotation) by the 8th EC directive. The present paper gives a state of the art analysis of the empirical research results with regard to auditor and audit firm rotation. In contrast to the perception of the EC, the majority of the empirical results doesn’t find evidence for increased
financial accounting and audit quality by audit firm rotation. Furthermore, the positive effects of the internal rotation period of seven years and the cooling off period of two years by the 8th EC
directive are not empirically proved yet.
OriginalspracheEnglisch
ZeitschriftInternational Journal of Regulation and Governance
Jahrgang1
Ausgabenummer3
Seiten (von - bis)7-13
Anzahl der Seiten7
ISSN0972-4907
DOIs
PublikationsstatusErschienen - 01.01.2012
Extern publiziertJa

DOI

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