Impact of Partner Change on Audit Quality: An Analysis of Partner and Firm Specialisation Effects. Issue 4 (20th January 2017)

• Record Type: Journal Article
• Authors: Arthur, Neal; Endrawes, Medhat; Ho, Shawn
• Is Part Of: Australian accounting review. Volume 27:Issue 4(2017:Dec.)
• Page Start: 368
• Page End: 381
• Publication Date: 2017-01-20
• Subjects: Accounting -- Australia -- Periodicals; Accounting -- Standards -- Australia -- Periodicals; Accounting -- Periodicals; Managerial accounting -- Periodicals; Corporations -- Finance -- Periodicals; 657.0994
• DOI: 10.1111/auar.12150
• Languages: English
• ISSNs: 1035-6908

Abstract

Abstract: This study investigates the impact of audit partner rotation on audit quality and whether industry specialisation moderates such a relationship. The results of this study show that audit partner rotation can enhance audit quality but only when both the incoming audit partner and the audit firm are industry specialists. The results of the study provide valuable insights into the effectiveness of audit partner rotation and auditor industry specialisation practices, and their impact on audit quality. The results have implications for the profession as well as regulators regarding audit partner and audit firm industry specialisation. This is the first study to examine the moderating effect of industry specialisation on the auditor rotation–audit quality relationship at the partner level. The introduction of industry specialisation as a moderating factor provides additional insights into the auditor rotation–audit quality relationship at the partner level. Abstract : This study shows that audit partner rotation can enhance audit quality but only when both the incoming audit partner and the audit firm are industry specialists. The introduction of industry specialisation as a moderating factor provides additional insights into the auditor rotation‐audit quality relationship at the partner level.