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Medientyp:
E-Artikel
Titel:
The Effect of Office Changes within Audit Firms on Clients' Audit Quality and Audit Fees
Beteiligte:
Hollingsworth, Carl W.;
Neal, Terry L.;
Reid, Colin D.
Erschienen:
American Accounting Association, 2020
Erschienen in:
Auditing: A Journal of Practice & Theory, 39 (2020) 1, Seite 71-99
Sprache:
Englisch
DOI:
10.2308/ajpt-52591
ISSN:
1558-7991;
0278-0380
Entstehung:
Anmerkungen:
Beschreibung:
SUMMARY While prior research has examined audit firm and audit partner rotation, we have little evidence on the impact of within-firm engagement team disruptions on the audit. To examine these disruptions, we identify a unique sample of companies where the audit firm issuing office changed but the audit firm did not change and investigate the effect of these changes on the audit. Our results indicate that companies that have a change in their audit firm's issuing office exhibit a decrease in audit quality and an increase in audit fees. In additional analysis, we partition office changes into two groups—client driven changes and audit firm driven changes. This analysis reveals that client driven changes are more likely to result in a higher audit fee while audit quality is unchanged. Conversely, audit firm driven changes do not result in a higher audit fee but do experience a decrease in audit quality.