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Mandatory Audit Firm Rotation and Audit Quality: Evidence from the Korean Audit Market
| Content Provider | Semantic Scholar |
|---|---|
| Author | Kwon, Soo Young |
| Copyright Year | 2010 |
| Abstract | Using a unique database consisting of 12,463 firm-year observations in Korea between 2000 and 2007, this study examines the effect of mandatory audit firm rotation on audit hours, audit fees, and audit quality. Since the Korean government mandated audit firm rotation in 2006, (1) audit hours increased, (2) audit fees increased, and (3) audit quality (measured as abnormal discretionary accruals) remained unchanged or decreased slightly. These results, which are robust to controlling for potential endogeneity between audit hours and earnings management and to measuring audit quality alternatively, suggest that mandatory audit firm rotation increases the cost for audit firms and clients while having no discernable positive effect on audit quality. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | https://www.business.unsw.edu.au/About-Site/Schools-Site/Accounting-Site/Documents/Y.Lim%20-%20Mandatory%20Audit%20Firm%20Rotation%20and%20Audit%20Quality%20-%20Evidence%20from%20the%20Korean%20Audit%20Market.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
