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...

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Autores principales:	Inas Aisyah Widyaningsih, Iman Harymawan, Agus Widodo Mardijuwono, Eka Sari Ayuningtyas, Dyah Ayu Larasati
Formato:	article
Lenguaje:	EN
Publicado:	Taylor & Francis Group 2019
Materias:	audit audit firm rotation audit quality Business HF5001-6182 Management. Industrial management HD28-70
Acceso en línea:	https://doaj.org/article/b860265247ab4fae90b8a600779788ca
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spelling	oai:doaj.org-article:b860265247ab4fae90b8a600779788ca2021-12-02T16:07:36ZAudit firm rotation and audit quality: Comparison before vs after the elimination of audit firm rotation regulations in Indonesia2331-197510.1080/23311975.2019.1695403https://doaj.org/article/b860265247ab4fae90b8a600779788ca2019-01-01T00:00:00Zhttp://dx.doi.org/10.1080/23311975.2019.1695403https://doaj.org/toc/2331-1975This 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.Inas Aisyah WidyaningsihIman HarymawanAgus Widodo MardijuwonoEka Sari AyuningtyasDyah Ayu LarasatiTaylor & Francis Grouparticleauditaudit firm rotationaudit qualityBusinessHF5001-6182Management. Industrial managementHD28-70ENCogent Business & Management, Vol 6, Iss 1 (2019)
institution	DOAJ
collection	DOAJ
language	EN
topic	audit audit firm rotation audit quality Business HF5001-6182 Management. Industrial management HD28-70
spellingShingle	audit audit firm rotation audit quality Business HF5001-6182 Management. Industrial management HD28-70 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
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.
format	article
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
title	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_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_sort	audit firm rotation and audit quality: comparison before vs after the elimination of audit firm rotation regulations in indonesia
publisher	Taylor & Francis Group
publishDate	2019
url	https://doaj.org/article/b860265247ab4fae90b8a600779788ca
work_keys_str_mv	AT inasaisyahwidyaningsih auditfirmrotationandauditqualitycomparisonbeforevsaftertheeliminationofauditfirmrotationregulationsinindonesia AT imanharymawan auditfirmrotationandauditqualitycomparisonbeforevsaftertheeliminationofauditfirmrotationregulationsinindonesia AT aguswidodomardijuwono auditfirmrotationandauditqualitycomparisonbeforevsaftertheeliminationofauditfirmrotationregulationsinindonesia AT ekasariayuningtyas auditfirmrotationandauditqualitycomparisonbeforevsaftertheeliminationofauditfirmrotationregulationsinindonesia AT dyahayularasati auditfirmrotationandauditqualitycomparisonbeforevsaftertheeliminationofauditfirmrotationregulationsinindonesia
_version_	1718384740424220672

Audit firm rotation and audit quality: Comparison before vs after the elimination of audit firm rotation regulations in Indonesia

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