Auditor Turnover Research Articles

The Influence of Regulation, Audit Delay, Audit Fees, and Firm Size on Auditor Switching in Transportation and Logistics Entities Listed on The Idx from 2018 to 2022

This study aims to demonstrate the impact of regulations, audit delay, audit fees, and firm size on auditor switching. The subjects of this observation are transportation and logistics entities listed on the Indonesia Stock Exchange during the period 2018-2022. The sampling method used is purposive sampling, resulting in 55 observation samples. The analysis in this study employs logistic regression analysis. The tool used is Eviews version 13. The results of the study prove that the variables of regulation, audit delay, audit fees, and firm size do not influence auditor turnover individually. However, when tested together, these variables collectively influence auditor turnover with a percentage of 31.6%, while the remaining 68.4% is explained by variables other than those observed.

Study of the Relationship between the Rotation of External Auditors and Audit Quality

Purpose - The objective of this research is to study the relationship between external auditor turnover and audit quality. To do this, we chose two measures of audit quality, namely discretionary accruals and the auditor's opinion. Design/methodology/approach - Using a sample of 37 Tunisian companies listed during the period from 2015 to 2021, the paper uses a logistic regression to investigate the association between the quality of the audit and the rotation of the auditors. Findings - The results obtained based on linear and logistic regression invalidate the two hypotheses which assume on the one hand that a long-term mandate negatively influences the quality of the audit, on the other hand the assumption that the rotation of the auditors has a positive impact on the quality of the audit. Contrary to what was expected in our research, the results of the logistic regression show that a long-term audit mandate has a positive effect on audit quality. Research limitations/implications – This research may be of interest to many developing countries that has not a lot of studies on the audit turnover. Future research should focus on the link between audit turnover consequences to overcome the gap which might exist in the literature. Practical implications – Previous studies has shown how it is important to focus on audit opinion to reduce asymmetric information between managers and stockholders. And, this study offers some insights about audit shipping that should be analyzed to understand audit turnover. Originality/value – This research highlights the role of audit opinion in the rotation of auditors in emerging markets. Consideration of this relationship may contribute to the understanding of the auditor turnover in developing countries.

The Influence of Audit Fees, Audit Tenure, and Auditor Switching on Audit Quality

Financial statement falsification involving company management and auditors is a prevalent issue in the business landscape. Ensuring the integrity of audit outcomes holds paramount importance in verifying the adherence of financial statements to generally accepted accounting standards (GAAP). Consequently, auditors are expected to maintain high professionalism, prioritizing objectivity over personal considerations in executing their responsibilities. This research aimed to assess the impact of audit fees, audit tenure, and auditor turnover on audit quality. Employing a quantitative research methodology, descriptive analysis and logistic regression tests were conducted to evaluate the hypotheses. The study targeted publicly traded companies within the financial sector, specifically in the insurance sub-sector, listed on the Indonesia Stock Exchange (IDX) from 2018 to 2022. Sample selection utilized purposive sampling techniques. Results reveal that audit fees significantly influence audit quality, whereas audit tenure and auditor turnover do not exhibit significant effects. This study contributes to efforts aimed at advancing audit quality.

Under the Hood of Activist Fraud Campaigns: Private Information Quality, Disclosure Incentives, and Stock Lending Dynamics

ABSTRACT Although activist short sellers can play a crucial role in fraud detection, they have come under scrutiny following accusations of systematically disseminating false negative information. We develop a framework delineating the roles of campaign-specific private information quality and short-selling dynamics in shaping disclosure incentives. We predict that the act of disclosure combined with pre-disclosure stock lending dynamics is informative about the quality of an activist’s private information. We find that increased pre-disclosure shorting intensity is associated with more negative post-disclosure returns, adverse media coverage, and consequential campaign outcomes, including auditor turnover, accounting restatements, class-action lawsuits, and performance-related delistings. Furthermore, elevated short-selling costs and risks magnify the association between pre-disclosure shorting intensity and post-disclosure underperformance. Finally, we examine V-shaped reversals and short covering following activists’ disclosures and find no evidence of systematic manipulation. We conclude that activists disclosing fraud allegations under their own names are discouraged from engaging in “short-and-distort” schemes. Data Availability: Data are available from the sources cited in the text. JEL Classifications: G12; G14; G23; M41.

PENDETEKSIAN FINANCIAL STATEMENT FRAUD MENGGUNAKAN FRAUD HEXAGON PADA PERUSAHAAN YANG TERINDEKS IDXBUMN20

This research has a problem with financial statement fraud with the smallest percentage of cases but has the greatest impact on state losses among other frauds. This study aims to detect financial statement fraud using fraud hexagon in IDXBUMN20 indexed companies. There are six dimensions in the fraud hexagon consisting of stimulus, ability (Capability), conspiracy (Collusion), opportunity (Opportunity), rationalisation, and (arrogance). This study measures financial statement fraud using the Beneish M-Score. The population of this study were 20 BUMN companies indexed on IDXBUMN20. To select the sample, purposive sampling method was used for 15 state-owned companies for 3 years of observation with 45 observations. Logistic regression model as an analysis technique. Data processing with SPSS 26 which obtained results showing that financial stability proxy stimulus, auditor turnover proxy opportunity and ineffective supervision proxy rationalization affect financial statement fraud. While the change of directors proxy capability, the number of independent commissioners who hold concurrent positions proxy collusion, and the number of CEO photos in the annual report proxy arrogance have no effect on financial statement fraud.

PENGARUH UKURAN PERUSAHAAN, OPINI AUDIT DAN PERGANTIAN AUDITOR TERHADAP KETEPATAN WAKTU PENYAMPAIAN LAPORAN KEUANGAN

The study aims to examine the effect of Company Size, Audit Opinion, and Auditor Turnover on the timeliness of financial reporting. The population in this study is the consumer cylclicals sector companies listed on the Indonesia Stock Exchange for the period 2020-2022. The sampling method used was a purposive sampling method in order to obtain 87 companies. The total data processed in this study were 261 data. The type of data used is secondary data in the form of annual financial reports for companies in the consumer cyclicals sector listed on the Indonesia Stock Exchange for the period 2020-2022. The data analysis method used in this study is logistic regression with the help of SPSS software version 24. The results of the study prove that all variables of Company Size, Audit Opinion, and Auditor Turnover together positively influence the timeliness of financial reporting. Then the result of the study partially proves that Company Size has no significant effect on the timeliness of financial reporting, then Audit opinion and Auditor Turnover has a significant positive effect on the timeliness of financial reporting.

The Economic Consequences of Heightened Materiality Uncertainty: An Auditing Perspective

ABSTRACT Using a Supreme Court ruling that rejected the use of “bright-line” rules previously relied upon in evaluating materiality claims, this study examines how heightened materiality uncertainty impacts audit pricing. We expect the heightened uncertainty to make it more difficult for auditors and clients to assess materiality and to reach a consensus on materiality assessment, which increases audit effort and engagement risk, leading to higher audit fees. Consistent with this prediction, we find that after the ruling, audit fees increase significantly for treatment firms in the circuits using bright-line rules in the pre-ruling period, relative to control firms not affected by the ruling. This effect is stronger when auditors have lower quality or lower industry expertise, and when investors have more diverse opinions. We also find that for firms audited by low-expertise auditors, auditor turnover due to auditor-client disagreement on materiality-related issues increases significantly for treatment firms relative to control firms. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: K2; M41; M42.

Individual Auditor Turnover and Audit Quality—Large Sample Evidence from U.S. Audit Offices

ABSTRACT We examine the relationship between audit quality and office-level auditor turnover. Using resumes of over 106,000 Big 4 auditors, we find that audit offices with higher turnover have a greater likelihood of client annual report restatements. This detrimental effect is more pronounced when the departing auditors are more experienced and when the office faces tighter human capital constraints and is primarily attributable to voluntary turnover. Further, such negative effect is borne mostly by complex clients and intangible-intensive clients but is weakened for clients with greater product similarity to the client portfolio of the audit office. Last, the impact of office-level turnover on audit quality persists after controlling for firm-level turnover. Our findings inform the current policy debate on whether and to what extent audit firms should disclose auditor turnover as a potential indicator of audit quality. Data Availability: Data are available from the public sources cited in the text. JEL Classifications: M42.

Dukungan Organisasi Persepsian, Stres Kerja, dan Intensi Berpindah Tempat Kerja

The high external auditor turnover phenomenon has triggered previous researchers to investigate it. The high level of auditor turnover causes inefficiencies for public accounting firms. This study examines whether there is a negative relationship between perceived organizational support and turnover intentions and analyses whether burnout mediates this relationship. This research obtained 57 samples analysed by using structural equation modelling (SEM), which was processed using Stata 14 software. This research documents that perceived organizational support is negatively correlated with turnover intentions. Furthermore, job stress was found to be able to mediate the association between perceived organizational support and turnover intention.

Does Financial Distress Contribute as an Intermediary Factor in Detecting Financial Statement Fraud ?

This study aims to investigate whether financial distress acts as an intermediary factor in detecting fraudulent financial statements in manufacturing companies listed on the Indonesia Stock Exchange. The purposive sampling method was used to select 105 manufacturing companies during the period 2017-2021. The analysis was conducted using the Outer Smart PLS model to evaluate the relationship between auditor turnover, board turnover, financial targets, ineffective supervision, capability, and financial distress on financial statement fraud. The results confirmed that there was no significant influence between capacity, board turnover, financial targets, ineffective supervision, and financial distress on financial statement fraud. In addition, financial distress also does not mediate the effect of other variables on financial statement fraud. This approach reflects the ethical philosophy in the study that emphasizes honesty, integrity, and transparency in corporate financial reporting. These results highlight the importance of effective supervisory strategies and strong internal controls in preventing and detecting financial statement fraud, regardless of the company's financial distress. This study contributes by exploring the role of financial distress in detecting financial statement fraud. For future research, it is important to investigate additional factors that influence fraud and develop more effective monitoring strategies. Contingency theory emphasizes the importance of contextual factors in organizational management, while Fraud theory pays attention to the motives and driving factors behind fraudulent behavior.

FAKTOR- FAKTOR PENENTU ADANYA AUDIT DELAY

Audit delay is the length of time needed by an independent auditor to complete his audit work, measured from the closing date of the financial year to the date stated by the independent auditor report. This research aims to determine the effect profitability, solvency, company size, audit committee and auditor turnover on audit delay. The population in this research is banking companies on the Indonesia Stock Exchange for the 2020-2022 period. The sampling method used was a purposive sampling method so that a sample of 44 banking companies was obtained. The analysis technique uses multiple linear regression analysis techniques. The research results show that the company size and audit committee have a negative effect on audit delay. Meanwhile profitability, solvency and Changing auditors has no effect on audit delay.

Pengaruh Pergantian Auditor, Reputasi KAP, Opini Audit, Komite Audit dan Ukuran Perusahaan terhadap Audit Delay

This study aims to examine the effect of auditor turnover, KAP reputation, audit opinion, audit committee and company size on audit delay. The research method used is quantitative. The total population in this study is 226 industrial sector manufacturing companies listed on the Indonesia Stock Exchange in 2020-2022. The sampling method uses purposive sampling techniques, so that the number of samples is obtained as many as 91 companies. The data analysis technique uses multiple linear regression analysis equations with the SPSS program. The results of this study show that changing auditors has a positive ang insignificant effect on auit delay, KAP reputation and audit committee have a significant negative effect on audit delay, audit opinion has an insignificant negative effect on audit delay, while company size has a significant positive effect on audit delay.

Should I Stay or Should I Go? Auditor Ethical Conflict and Turnover Intention

Ethical conflicts (ECs), dilemmas auditors face when personal values or professional obligations clash with their actions, pose significant challenges to the auditing profession, potentially influencing turnover intention (TI). This study addresses a knowledge gap in the related research by focusing on two critical EC triggers: workload (WL) and perceived auditor ethical failure (PAEF: ethical sensitivity), which refers to auditors’ perceptions of ethical violations within their profession. Grounded in role theory and ethical climate theory, our study investigates the impact of WL and PAEF on ECs and explores how these conflicts mediate the relationship between PAEF/WL and TI. Additionally, we examine the moderating role of organisational ethical climate (EtC) in these relationships. Using a survey of auditors and employing partial least squares structural equation modelling (PLS-SEM), our results reveal that both WL and PAEF increase ECs, thus escalating TI. The findings suggest that a firm’s perceived EtC can negatively moderate the relationship between PAEF and ECs. The study underlines the importance of fostering a strong EtC to manage ECs effectively and provides valuable implications for professionals, regulators, and academics seeking to improve ethical practices within auditing firms and to reduce auditor turnover.

ANALYSIS OF FINANCIAL FACTORS AND NON-FINANCIAL FACTORS AFFECTING AUDITOR SWITCHING

This study aims to determine the effect of monetary and non-monetary components on voluntary auditor turnover. Management, board, and audit committee quality are examples of non-financial impacts. Factors such as business growth, financial problems, profitability, and liquidity are included in the assessment of financial elements. Auditors can be replaced by law or voluntarily. Quantitative methods are used in this research. Specifically, this study will investigate manufacturing companies in the food and beverage industry during the period 2018-2022. Random selection of 14 companies is used as a sample method. The data analysis method used is logistic regression analysis. The results showed that the factors of management quality, board of commissioners, and audit committee did not have a significant impact on the auditor's decision to voluntarily resign. Financial crisis, profitability, and liquidity have no positive impact on voluntary auditor turnover. However, company growth has an influence on voluntary auditor turnover.

Moderasi Komite Audit Sebagai Peredam Kecurangan Pelaporan Keuangan

Financial statement manipulation is a form of fraud that can lead to losses in a company's performance. This study aims to assess the influence of factors in detecting fraudulent corporate financial statements. The research focuses on manufacturing companies listed on the Indonesia Stock Exchange for the period 2017 to 2021. The dependent variable used in this study is fraudulent financial reporting. The independent variables include pressure (comprising financial targets, financial stability, and external pressure), opportunity (comprising ineffective supervision and industry nature), rationalization (comprising auditor turnover and rationalization), competence (measured by director turnover), and arrogance (measured by the frequency of CEO photo appearances). Additionally, the Audit Committee is used as a moderating variable. The test results indicate that financial targets have a significant negative impact on fraudulent financial reporting, while financial stability has a significant positive influence. However, external pressure, ineffective supervision, industry nature, auditor turnover, rationalization, director turnover, and the frequency of CEO photo appearances do not significantly affect fraudulent financial reporting. The implications of this research highlight the importance for companies to carefully monitor and manage their financial targets to avoid fraudulent practices in financial reporting. Furthermore, the role of the Audit Committee in overseeing financial statements needs to be strengthened to mitigate the risk of fraud. The research methodology employed in this study involves panel data regression analysis to examine the influence of the mentioned variables on fraudulent financial reporting.

Impact of Auditor Turnover on Stock Price Crash Risk: Insights from China's Capital Market

Impact of Auditor Turnover on Stock Price Crash Risk: Insights from China's Capital Market

THE INFLUENCE OF AUDIT TENURE, AUDIT OPINION, KAP REPUTATION AND AUDITOR SWITCH ON AUDIT REPORT LAG WITH AUDITOR INDUSTRY SPECIALIZATION AS A MODERATION VARIABLE

The purpose of this paper is to test and evaluate how much influence Audit Tenure, Audit Opinion, Public Accounting Firm Reputation, Auditor Switching, and Auditor Industry Specialization as moderator variable has on Audit Report Lag. This research uses Indonesian Stock Exchange data as the population of this study and to examine the companies in the food and beverage sector. This research uses quantitative methodology and secondary sources. In 2021, the Indonesian Stock Exchange is expected to list 39 food and beverage companies. The sample size for this study was 22 food and beverage companies and 110 data were used as samplesand was selected using the purposive sampling method. This research utilizes SPSS version 26 (Statistical Package for Social Sciences) for its statistical analytical needs.This reasearch data analysis uses moderated regression analysis.In this research variable such as Audit Tenure, Audit Opinion, Public Accounting Firm Reputation, Auditor Switching, Auditor Industry Specialization and Audit Report Lag’s Indicator was based on previous studies. Audit tenure is measured by the length of the KAP's engagement with the same auditee. Audit Opinion using the nominal ratio of type opinion given. Public Accounting Firm Reputation indicator’s wheter a company using Big4 as their auditor or not. Auditor Switching indicator’s if company changing its KAP is given code 1, if not 0. Auditor Industry Specialization using SPEC formulation as the indicator. And for the dependent variable, Audit Report Lag measured in days from the date of the closing of company the book until the date of financial report is published to the public.According to this study, longer audit tenure resulted in longer audit report lag. There is no statistically significant correlation between audit report lag and variables audit opinion, audit firm reputation, or auditor switching. There is a positive and statistically significant relationship between audit tenure and auditor industry specialization as a moderation variable with audit report lag. Auditor industry specialization can not moderate the impact of audit opinion, KAP reputation, and auditor turnover on audit report lag.

The Analysis of Healthy Lifestyle Mechanisms in Overcoming Stress on Public Accountant Firm Auditors

The problem of stress often occurs in auditors who work in Public Accountant Firms, especially during a peak season. Several previous studies showed that role stress hurts job outcomes. To overcome this, this research tries to provide a solution and test whether a healthy lifestyle mechanism (healthy lifestyle, vitality, and psychological well-being) can minimize the negative impact of role stress (role ambiguity, role conflict, role overload, and job burnout) to job outcome (job satisfaction, performance, turnover intentions, and organizational commitment). The results of this study indicate that a healthy lifestyle mechanism can minimize the negative impact of role stressors on job satisfaction and organizational commitment. However, this study has not been able to prove that a healthy lifestyle mechanism can reduce the auditor's desire to shift work and improve auditor performance. This study also shows the results that job satisfaction can reduce the auditor's turnover intention and organizational commitment is not a factor that can reduce that intention.

Fraud Diamond In Financial Reporting Fraud Detection with Audit Committee as A Moderation

The purpose of this study was to determine the effect of fraud diamond using four proxies, namely Financial Target, Ineffective Monitoring, Auditor Change and Board of Directors Change on the detection of financial statement fraud and the influence of the audit committee relationship as a moderating variable. This study used a sample of 16 companies from the agricultural product sub-sector that were listed on the Indonesia Stock Exchange from 2017 to 2021. The data used is secondary data in the form of financial reports and annual reports of the sample companies. Hypothesis testing was carried out using a panel data linear regression model with eviews 12 software. The results of this study indicate that Financial Targets and Auditor Turnover have an effect on fraudulent financial reports, Ineffective Monitoring and replacement of directors have no effect on fraudulent financial statements. The audit committee was unable to moderate the influence of Financial Targets, Ineffective Monitoring, Auditor replacements, Directors replacement on fraudulent financial reporting

The Impact of Supervisor Relationships on Auditor Turnover Intentions Using Leader-Member Exchange Theory

ABSTRACT This study expands understanding of auditor relationships and turnover by introducing the measurement of Leader-Member Exchange (LMX) to an audit setting. LMX—which considers overall quality of subordinates’ relationships with their supervisor—is well established in the management literature but has previously only been referred to as a theoretical construct in the audit literature. Utilizing a well-validated scale, we measure LMX with 167 practicing auditors. We find LMX with a single supervisor significantly impacts retention via organizational commitment. This finding is novel in the LMX literature given the unique audit setting where subordinates have multiple supervisors and transitory teams. In an exploratory analysis, we also find female subordinates form lower-quality relationships with supervisors, regardless of supervisor sex, which in turn can influence the impact of LMX on organizational commitment. Results demonstrate the value of measuring LMX in audit research and practically highlight the importance of fostering positive, strong auditor-supervisor relationships. Data Availability: Contact the authors. JEL Classifications: L2; M40; M42; M50.