An Empirical Investigation of Auditor Rotation Requirements

11 Pages Posted: 17 Oct 2007

See all articles by Suzanne Lowensohn

Suzanne Lowensohn

Colorado State University, Fort Collins - Department of Accounting

Jacqueline Reck

University of South Florida - College of Business Administration

Jeffrey R. Casterella

University of Auckland

Barry Lewis

Colorado State University, Fort Collins

Date Written: September 2007

Abstract

We add to the literature on mandatory auditor rotation by examining the Florida government audit environment in which there exist both rotation and non-rotation regimes and in which there exists an independent measure of the joint quality of the audit and of the financial statements of the reporting entity. In this environment we compare rotating entities with entities that have established long-term relationships with their auditors. We find that after controlling for other factors believed to be associated with report quality, governments that rotate receive higher quality reports.

Keywords: mandatory auditor rotation, reporting quality

JEL Classification: M49, M41, M43, G34, G38

Suggested Citation

Lowensohn, Suzanne and Reck, Jacqueline and Casterella, Jeffrey R. and Lewis, Barry, An Empirical Investigation of Auditor Rotation Requirements (September 2007). Available at SSRN: https://ssrn.com/abstract=1021789 or http://dx.doi.org/10.2139/ssrn.1021789

Suzanne Lowensohn

Colorado State University, Fort Collins - Department of Accounting ( email )

256 Rockwell Hall
Fort Collins, CO 80523
United States

Jacqueline Reck

University of South Florida - College of Business Administration ( email )

4202 E. Fowler Avenue, BSN 3403
Tampa, FL 33620-5500
United States

Jeffrey R. Casterella

University of Auckland ( email )

Auckland
New Zealand
970-2170947 (Phone)

Barry Lewis (Contact Author)

Colorado State University, Fort Collins ( email )

Fort Collins, CO 80523-1771
United States

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