Abstract
Motivated by the regulatory requirement of mandatory partner rotation in Australia, this study examines the impact of mandatory partner rotation on audit reporting lag and audit fees. Using a sample of 6,228 firm-year observations from 2010 to 2014, we find that companies have shorter audit reporting lag in the year of the mandatory partner rotation. Further, companies audited by non-Big 4auditors not only have shorter audit reporting lag but also pay higher audit fees in the initial year of mandatory partner rotation. The results suggest that the costs of mandatory partner rotation may be higher for non-Big 4 audit segment and non-Big 4 auditors at least partially pass on the cost to their audit clients, especially to those larger clients who require more timely completion of audit reports.
| Original language | English |
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| Journal | Annual Conference of Accounting and Finance Association of Australia and New Zealand (AFAANZ) |
| Publication status | Published - 2010 |
| Event | Annual Conference of Accounting and Finance Association of Australia and New Zealand (AFAANZ) - Christchurch New Zealand Duration: 1 Jan 2010 → … http://www.afaanz.org/openconf/2010/openconf.php |