External rotation of the auditor

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Authors

The European Commission (EC) discusses in her regulation draft of 2011 the external mandatory auditor rotation (audit firm rotation) principally after six years as a reform measure to increase auditor independence, which could complement the internal mandatory rotation (auditor rotation) by the 8th EC directive of 2006. First, the present short survey paper contains a theoretical foundation of audit firm rotation, whereby the influences on low balling will be discussed. Furthermore, the paper gives a review of the empirical auditor change research. In contrast to the perception of the EC, the empirical results mainly don’t state an increased financial accounting and audit quality by an external rotation of the auditor.
Original languageEnglish
JournalJournal of Management Control
Volume23
Issue number1
Pages (from-to)81-91
Number of pages11
ISSN2191-4761
DOIs
Publication statusPublished - 09.2012
Externally publishedYes

    Research areas

  • Management studies
  • Audit quality, Earnings management, Empirical auditor change research, Low balling