THE IMPACT OF MANDATORY AUDIT FIRM ROTATION ON AUDIT QUALITY AND AUDITOR INDEPENDENCE
EUGEN NICOLAESCUABSTRACT. My analysis complements the growing literature on costs and benefits of mandatory audit firm rotation, positive effects of mandatory firm rotation on auditor independence, and the effects of audit quality on aspects of the auditor-client relationship. The theory that I shall seek to elaborate here puts considerable emphasis on the importance of political connections to the demand for Big Four audits, the effects of mandatory audit firm rotation on auditor independence and audit quality, the relationship between audit tenure and stock option backdating scandals, and the potential endogeneity between auditor choice and political connections. pp. 64–69
JEL Codes: H83, M42
Keywords: mandatory firm rotation; auditor; independence; quality
How to cite: Nicolaescu, Eugen (2013), "The Impact of Mandatory Audit Firm Rotation on Audit Quality and Auditor Independence," Psychosociological Issues in Human Resource Management 1(2): 64–69.