JOURNAL OF ACCOUNTING AND FINANCE
The Effects of Audit Rotation on Perceived Auditor Independence and Perceived Financial
Statement Reliability: Further Evidence
Author(s): Adrian L. Mayse
Citation: Adrian L. Mayse, (2018) "The Effects of Audit Rotation on Perceived Auditor Independence and Perceived Financial Statement Reliability: Further Evidence", Journal of Accounting and Finance, Vol. 18, ss. 3, pp. 138-148
Article Type: Research paper
Publisher: North American Business Press
Abstract:
Are lenders’ perceptions of auditor independence and financial statement reliability different depending on the level of audit rotation (no audit rotation, audit partner rotation, and audit firm rotation) implemented for a nonpublic company? This study consists of a within-subjects experiment. The results suggest that lenders are more confident that the auditor is independent when there is partner rotation compared to no rotation, and partner rotation compared to firm rotation. Moreover, the results suggest lenders are more confident that the audited financial statements are free from unintentional and intentional misstatements when there is partner rotation compared to no rotation.