Further evidence on mandatory partner rotation and audit pricing: a supply-side perspective

Ferguson, A; Lam, P; Ma, N

Further evidence on mandatory partner rotation and audit pricing: a supply-side perspective

Ferguson, A

Lam, P

Ma, N

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Publication Type:: Journal Article
Citation:: Accounting and Finance, 2019, 59 (2), pp. 1055 - 1100
Issue Date:: 2019-06-01

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Field	Value	Language
dc.contributor.author	Ferguson, A https://orcid.org/0000-0003-0535-0643	en_US
dc.contributor.author	Lam, P https://orcid.org/0000-0001-5386-3705	en_US
dc.contributor.author	Ma, N https://orcid.org/0000-0002-0341-1003	en_US
dc.date.issued	2019-06-01	en_US
dc.identifier.citation	Accounting and Finance, 2019, 59 (2), pp. 1055 - 1100	en_US
dc.identifier.issn	0810-5391	en_US
dc.identifier.uri	http://hdl.handle.net/10453/119008
dc.description.abstract	© 2017 AFAANZ This study examines effects of mandatory partner rotation (MPR) on audit fees of Australian-listed companies. Using a fee changes approach, evidence of fee increases in year of the MPR driven by smaller offices of non-Big 4 auditors is found, consistent with supply-side resource constraint arguments. Broadly consistent findings are observed using a fee levels approach. Appointment of inexperienced partners to MPR engagements has no discernible effect on fees. Additional analysis of audit reporting lag indicates fee increases reflect additional audit effort as opposed to a pricing strategy. Overall, the evidence supports recent moves by policy-makers to soften MPR requirements.	en_US
dc.relation.ispartof	Accounting and Finance	en_US
dc.relation.isbasedon	10.1111/acfi.12269	en_US
dc.subject.classification	Accounting	en_US
dc.title	Further evidence on mandatory partner rotation and audit pricing: a supply-side perspective	en_US
dc.type	Journal Article
utslib.citation.volume	2	en_US
utslib.citation.volume	59	en_US
utslib.for	1501 Accounting, Auditing and Accountability	en_US
utslib.for	1502 Banking, Finance and Investment	en_US
utslib.for	1402 Applied Economics	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Accounting Discipline
utslib.copyright.status	closed_access
pubs.issue	2	en_US
pubs.publication-status	Published	en_US
pubs.volume	59	en_US

Abstract:

© 2017 AFAANZ This study examines effects of mandatory partner rotation (MPR) on audit fees of Australian-listed companies. Using a fee changes approach, evidence of fee increases in year of the MPR driven by smaller offices of non-Big 4 auditors is found, consistent with supply-side resource constraint arguments. Broadly consistent findings are observed using a fee levels approach. Appointment of inexperienced partners to MPR engagements has no discernible effect on fees. Additional analysis of audit reporting lag indicates fee increases reflect additional audit effort as opposed to a pricing strategy. Overall, the evidence supports recent moves by policy-makers to soften MPR requirements.

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/119008