Audit Tenure and Audit Quality: the Renewal Sense of Comfort?
This study is aimed at providing empirical evidence on the association between audit tenure and audit quality to support the argument of the enactment of regulation on audit rotation in Indonesia. Using the theory of comfort perspective, this study focused on the person-to-person relationship; that...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
University of Wollongong
2019-12-01
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| Series: | Australasian Accounting, Business and Finance Journal |
| Subjects: | |
| Online Access: | https://ro.uow.edu.au/aabfj/vol13/iss4/4 |
| _version_ | 1818544143148777472 |
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| author | Albert Agusto Buntara Desi Adhariani |
| author_facet | Albert Agusto Buntara Desi Adhariani |
| author_sort | Albert Agusto Buntara |
| collection | DOAJ |
| description | This study is aimed at providing empirical evidence on the association between audit tenure and audit quality to support the argument of the enactment of regulation on audit rotation in Indonesia. Using the theory of comfort perspective, this study focused on the person-to-person relationship; that is the relationship between partners of the public auditing firm and the client firm’s CEO; as well as on the relations at the firm level. Panel regression is employed to study the association of audit tenure and audit quality. The results revealed the fact that the audit partner and CEO tenure measured by the years of the audit contract has a negative association with audit quality proxied by discretionary accruals. Furthermore, the tenure of the public auditing firm and the client’s firm had a moderately significant positive impact on companies’ audit quality. The results imply that the regulation of audit partner rotation is needed to renew the sense of comfort in terms of maintaining high audit quality. |
| first_indexed | 2024-12-11T22:44:36Z |
| format | Article |
| id | doaj.art-6d66104a790f4c33861947093b9c2bb1 |
| institution | Directory Open Access Journal |
| issn | 1834-2000 1834-2019 |
| language | English |
| last_indexed | 2024-12-11T22:44:36Z |
| publishDate | 2019-12-01 |
| publisher | University of Wollongong |
| record_format | Article |
| series | Australasian Accounting, Business and Finance Journal |
| spelling | doaj.art-6d66104a790f4c33861947093b9c2bb12022-12-22T00:47:39ZengUniversity of WollongongAustralasian Accounting, Business and Finance Journal1834-20001834-20192019-12-01134466210.14453/aabfj.v13i4.4Audit Tenure and Audit Quality: the Renewal Sense of Comfort?Albert Agusto Buntara0Desi Adhariani1Universitas Indonesia, IndonesiaUniversitas Indonesia, IndonesiaThis study is aimed at providing empirical evidence on the association between audit tenure and audit quality to support the argument of the enactment of regulation on audit rotation in Indonesia. Using the theory of comfort perspective, this study focused on the person-to-person relationship; that is the relationship between partners of the public auditing firm and the client firm’s CEO; as well as on the relations at the firm level. Panel regression is employed to study the association of audit tenure and audit quality. The results revealed the fact that the audit partner and CEO tenure measured by the years of the audit contract has a negative association with audit quality proxied by discretionary accruals. Furthermore, the tenure of the public auditing firm and the client’s firm had a moderately significant positive impact on companies’ audit quality. The results imply that the regulation of audit partner rotation is needed to renew the sense of comfort in terms of maintaining high audit quality.https://ro.uow.edu.au/aabfj/vol13/iss4/4audit qualityaudit partner tenurediscretionary accrualrenewal comfortindonesia |
| spellingShingle | Albert Agusto Buntara Desi Adhariani Audit Tenure and Audit Quality: the Renewal Sense of Comfort? Australasian Accounting, Business and Finance Journal audit quality audit partner tenure discretionary accrual renewal comfort indonesia |
| title | Audit Tenure and Audit Quality: the Renewal Sense of Comfort? |
| title_full | Audit Tenure and Audit Quality: the Renewal Sense of Comfort? |
| title_fullStr | Audit Tenure and Audit Quality: the Renewal Sense of Comfort? |
| title_full_unstemmed | Audit Tenure and Audit Quality: the Renewal Sense of Comfort? |
| title_short | Audit Tenure and Audit Quality: the Renewal Sense of Comfort? |
| title_sort | audit tenure and audit quality the renewal sense of comfort |
| topic | audit quality audit partner tenure discretionary accrual renewal comfort indonesia |
| url | https://ro.uow.edu.au/aabfj/vol13/iss4/4 |
| work_keys_str_mv | AT albertagustobuntara audittenureandauditqualitytherenewalsenseofcomfort AT desiadhariani audittenureandauditqualitytherenewalsenseofcomfort |