Audit firm tenure and qualified opinions: New evidence from Spain
The 2010 Green Paper on Audit Policy by the European Commission has explicitly questioned the sufficiency of audit rotation rules established by European Union Members to guarantee auditor independence. In addition, the Paper clearly states that more research is needed regarding the effects of long...
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Universidad de Murcia
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doaj-28bf4c2f790d4e2d959e472bcd8229442020-11-25T02:50:22ZengUniversidad de MurciaRevista de Contabilidad: Spanish Accounting Review1138-48911988-46722019-03-0116210.1016/j.rcsar.2013.02.001Audit firm tenure and qualified opinions: New evidence from SpainJosep Garcia-BlandonJosep M. Argilés-Bosch The 2010 Green Paper on Audit Policy by the European Commission has explicitly questioned the sufficiency of audit rotation rules established by European Union Members to guarantee auditor independence. In addition, the Paper clearly states that more research is needed regarding the effects of long audit tenures on independence. In this article, we have replicated the research by Ruiz-Barbadillo, Gómez-Aguilar, and Biedma (2005) about the effects of audit firm tenure on independence with more updated data. However, unlike them, we have performed panel data estimations instead of pooled regression. Our approach allows for a better control of individual unobserved heterogeneity, thus reducing potential problems caused by omitted variable bias. While Ruiz-Barbadillo et al. reported an unexpected positive effect of tenure on the likelihood of audit qualifications, we do not show any significant effect of tenure on the opinion of the audit report. Our results are robust to various sensitivity analyses. https://revistas.um.es/rcsar/article/view/367931Rotación del auditorIndependenciaSalvedades |
collection |
DOAJ |
language |
English |
format |
Article |
sources |
DOAJ |
author |
Josep Garcia-Blandon Josep M. Argilés-Bosch |
spellingShingle |
Josep Garcia-Blandon Josep M. Argilés-Bosch Audit firm tenure and qualified opinions: New evidence from Spain Revista de Contabilidad: Spanish Accounting Review Rotación del auditor Independencia Salvedades |
author_facet |
Josep Garcia-Blandon Josep M. Argilés-Bosch |
author_sort |
Josep Garcia-Blandon |
title |
Audit firm tenure and qualified opinions: New evidence from Spain |
title_short |
Audit firm tenure and qualified opinions: New evidence from Spain |
title_full |
Audit firm tenure and qualified opinions: New evidence from Spain |
title_fullStr |
Audit firm tenure and qualified opinions: New evidence from Spain |
title_full_unstemmed |
Audit firm tenure and qualified opinions: New evidence from Spain |
title_sort |
audit firm tenure and qualified opinions: new evidence from spain |
publisher |
Universidad de Murcia |
series |
Revista de Contabilidad: Spanish Accounting Review |
issn |
1138-4891 1988-4672 |
publishDate |
2019-03-01 |
description |
The 2010 Green Paper on Audit Policy by the European Commission has explicitly questioned the sufficiency of audit rotation rules established by European Union Members to guarantee auditor independence. In addition, the Paper clearly states that more research is needed regarding the effects of long audit tenures on independence. In this article, we have replicated the research by Ruiz-Barbadillo, Gómez-Aguilar, and Biedma (2005) about the effects of audit firm tenure on independence with more updated data. However, unlike them, we have performed panel data estimations instead of pooled regression. Our approach allows for a better control of individual unobserved heterogeneity, thus reducing potential problems caused by omitted variable bias. While Ruiz-Barbadillo et al. reported an unexpected positive effect of tenure on the likelihood of audit qualifications, we do not show any significant effect of tenure on the opinion of the audit report. Our results are robust to various sensitivity analyses.
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topic |
Rotación del auditor Independencia Salvedades |
url |
https://revistas.um.es/rcsar/article/view/367931 |
work_keys_str_mv |
AT josepgarciablandon auditfirmtenureandqualifiedopinionsnewevidencefromspain AT josepmargilesbosch auditfirmtenureandqualifiedopinionsnewevidencefromspain |
_version_ |
1724739005755424768 |