Regulation of auditor change in Australia : audit pricing, reporting lag and equity valuation implications

Ma, Nelson

Regulation of auditor change in Australia : audit pricing, reporting lag and equity valuation implications

Ma, Nelson

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Publication Type:: Thesis
Issue Date:: 2016

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Field	Value	Language
dc.contributor.author	Ma, Nelson
dc.date.accessioned	2016-06-26T23:36:12Z
dc.date.available	2016-06-26T23:36:12Z
dc.date.issued	2016
dc.identifier.uri	http://hdl.handle.net/10453/44189
dc.description	University of Technology Sydney. Faculty of Business.	en_AU
dc.description.abstract	This thesis provides evidence on the impact on two aspects of auditor change for Australian listed companies. Firstly, changes in audit partners are mandated, requiring partners rotate off engagements after a fixed tenure. Recently, practitioner based concerns about the costs of rotation for both auditors and clients have precipitated amendments to the rule in Australia, Canada and the UK. Evidence in this thesis shows a cost to clients and auditors in the form of increased in audit fees and audit reporting lag in the rotation year that corroborates anecdotal practitioner evidence. Secondly, the process of voluntarily changing audit firms (auditor switching) is regulated under a consent-based framework mitigating information flow to the market. In 2013, the Australian corporate regulator, the Australian Securities and Investments Commission (ASIC), sought stakeholder input on the information provided to the market under the consent framework to inform policy deliberations. This can be viewed as couching the possibility of a move towards adoption of a disclosure-based approach similar to the approach in the US and UK. Accordingly, this thesis investigates market reactions to auditor switch announcements. Results show no market reactions, consistent with the market not considering such disclosures to be informative. The overall findings presented in this thesis lend support to the adoption of amendments that allow for flexibility.	en_AU
dc.format	Thesis (PhD)
dc.language.iso	en_AU	en_AU
dc.relation	https://opus.lib.uts.edu.au/bitstream/10453/44189/6/02whole.pdf
dc.rights	The author owns the copyright in this thesis including all reproduction and reuse rights for the work. The work may not be altered without the permission of the copyright owner. Attribution is essential when quoting or paraphrasing from this thesis.
dc.rights	au.edu.uts.lib/ppc
dc.rights	info:eu-repo/semantics/openAccess
dc.subject	Auditor change.	en
dc.subject	Fixed tenure.	en
dc.subject	Costs of rotation.	en
dc.subject	Audit reporting lag.	en
dc.subject	Adoption of a disclosure-based approach.	en
dc.title	Regulation of auditor change in Australia : audit pricing, reporting lag and equity valuation implications	en_AU
dc.type	Thesis	en_AU
utslib.copyright.status	open_access

Abstract:

This thesis provides evidence on the impact on two aspects of auditor change for Australian listed companies. Firstly, changes in audit partners are mandated, requiring partners rotate off engagements after a fixed tenure. Recently, practitioner based concerns about the costs of rotation for both auditors and clients have precipitated amendments to the rule in Australia, Canada and the UK. Evidence in this thesis shows a cost to clients and auditors in the form of increased in audit fees and audit reporting lag in the rotation year that corroborates anecdotal practitioner evidence. Secondly, the process of voluntarily changing audit firms (auditor switching) is regulated under a consent-based framework mitigating information flow to the market. In 2013, the Australian corporate regulator, the Australian Securities and Investments Commission (ASIC), sought stakeholder input on the information provided to the market under the consent framework to inform policy deliberations. This can be viewed as couching the possibility of a move towards adoption of a disclosure-based approach similar to the approach in the US and UK. Accordingly, this thesis investigates market reactions to auditor switch announcements. Results show no market reactions, consistent with the market not considering such disclosures to be informative. The overall findings presented in this thesis lend support to the adoption of amendments that allow for flexibility.

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http://hdl.handle.net/10453/44189