Audit firm rotation and audit quality: Comparison before vs after the elimination of audit firm rotation regulations in Indonesia
This paper examines whether the changes in audit rotation policy affect the relationship between audit firm rotation and audit quality in Indonesia. This study uses 2,403 observations from 371 firms listed on the IDX for the period 2010–2017. This study uses Ordinary Least Squares regression to test...
| Main Authors: | , , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Taylor & Francis Group
2019-01-01
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| Series: | Cogent Business & Management |
| Subjects: | |
| Online Access: | http://dx.doi.org/10.1080/23311975.2019.1695403 |
| _version_ | 1818751721996812288 |
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| author | Inas Aisyah Widyaningsih Iman Harymawan Agus Widodo Mardijuwono Eka Sari Ayuningtyas Dyah Ayu Larasati |
| author_facet | Inas Aisyah Widyaningsih Iman Harymawan Agus Widodo Mardijuwono Eka Sari Ayuningtyas Dyah Ayu Larasati |
| author_sort | Inas Aisyah Widyaningsih |
| collection | DOAJ |
| description | This paper examines whether the changes in audit rotation policy affect the relationship between audit firm rotation and audit quality in Indonesia. This study uses 2,403 observations from 371 firms listed on the IDX for the period 2010–2017. This study uses Ordinary Least Squares regression to test the hypothesis. We find that, in the mandatory audit rotation period (pre-period), there is no significant association between audit rotation and audit quality. Interestingly, we find a positive relationship between audit rotation and audit quality in the voluntary audit rotation (post-period). Our result implies that voluntary audit rotation without any coercive regulation is more effective in improving audit quality. This research provides an insight to policy makers that eliminating the regulation of audit firm rotation is an effective decision to enhance audit quality. |
| first_indexed | 2024-12-18T04:40:05Z |
| format | Article |
| id | doaj.art-b860265247ab4fae90b8a600779788ca |
| institution | Directory Open Access Journal |
| issn | 2331-1975 |
| language | English |
| last_indexed | 2024-12-18T04:40:05Z |
| publishDate | 2019-01-01 |
| publisher | Taylor & Francis Group |
| record_format | Article |
| series | Cogent Business & Management |
| spelling | doaj.art-b860265247ab4fae90b8a600779788ca2022-12-21T21:20:45ZengTaylor & Francis GroupCogent Business & Management2331-19752019-01-016110.1080/23311975.2019.16954031695403Audit firm rotation and audit quality: Comparison before vs after the elimination of audit firm rotation regulations in IndonesiaInas Aisyah Widyaningsih0Iman Harymawan1Agus Widodo Mardijuwono2Eka Sari Ayuningtyas3Dyah Ayu Larasati4Universitas AirlanggaUniversitas AirlanggaUniversitas AirlanggaUniversitas AirlanggaUniversitas AirlanggaThis paper examines whether the changes in audit rotation policy affect the relationship between audit firm rotation and audit quality in Indonesia. This study uses 2,403 observations from 371 firms listed on the IDX for the period 2010–2017. This study uses Ordinary Least Squares regression to test the hypothesis. We find that, in the mandatory audit rotation period (pre-period), there is no significant association between audit rotation and audit quality. Interestingly, we find a positive relationship between audit rotation and audit quality in the voluntary audit rotation (post-period). Our result implies that voluntary audit rotation without any coercive regulation is more effective in improving audit quality. This research provides an insight to policy makers that eliminating the regulation of audit firm rotation is an effective decision to enhance audit quality.http://dx.doi.org/10.1080/23311975.2019.1695403auditaudit firm rotationaudit quality |
| spellingShingle | Inas Aisyah Widyaningsih Iman Harymawan Agus Widodo Mardijuwono Eka Sari Ayuningtyas Dyah Ayu Larasati Audit firm rotation and audit quality: Comparison before vs after the elimination of audit firm rotation regulations in Indonesia Cogent Business & Management audit audit firm rotation audit quality |
| title | Audit firm rotation and audit quality: Comparison before vs after the elimination of audit firm rotation regulations in Indonesia |
| title_full | Audit firm rotation and audit quality: Comparison before vs after the elimination of audit firm rotation regulations in Indonesia |
| title_fullStr | Audit firm rotation and audit quality: Comparison before vs after the elimination of audit firm rotation regulations in Indonesia |
| title_full_unstemmed | Audit firm rotation and audit quality: Comparison before vs after the elimination of audit firm rotation regulations in Indonesia |
| title_short | Audit firm rotation and audit quality: Comparison before vs after the elimination of audit firm rotation regulations in Indonesia |
| title_sort | audit firm rotation and audit quality comparison before vs after the elimination of audit firm rotation regulations in indonesia |
| topic | audit audit firm rotation audit quality |
| url | http://dx.doi.org/10.1080/23311975.2019.1695403 |
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