Abstract
Auditor Tenure, Audit Firm Rotation and Audit Quality: A Literature Review
Highlights
The global financial crisis and the collapse of many large companies have generated increased attention and focus with regard to accounting and external auditing issues
The importance of audit quality arises from its effect on the reliability and credibility of financial statements and the auditor's opinion; due to the auditor's opinion could be misleading if the external auditor perform a weak work, and this will affect the decisions of stakeholders and users
The importance of audit quality arises from its effect on the reliability and credibility of financial reports and the auditor's opinion; due to the auditor's opinion could be misleading if the external auditor perform a weak work, and this will affect the decisions of stakeholders and users
Summary
The global financial crisis and the collapse of many large companies have generated increased attention and focus with regard to accounting and external auditing issues. The investors, users, regulators, and shareholders blame the external auditors and corporate governance mechanisms on doing a weak audit due to the recent cases of collapses, earnings management and fraud. The functions of external auditing and corporate governance might have direct or indirect effects on the confidence of investors and users, financial statements and earnings management. The importance of audit quality arises from its effect on the reliability and credibility of financial statements and the auditor's opinion; due to the auditor's opinion could be misleading if the external auditor perform a weak work, and this will affect the decisions of stakeholders and users. Previous studies provided mixed evidence about the relationship between auditor tenure and audit quality. Others still believe that audit quality diminishes with long tenure . (e.g Ilaboya & Ohiokha, 2014; Gelaneh, 2011; Tepalagul & Lin 2015; LIM et al, 2010; Adeyemi & Fagbemi,2010; Gelaneh, 2011)
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
More From: International Journal of Academic Research in Business and Social Sciences
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.