Audit tenure and audit Qualifications in a low litigation risk setting: An analysis of the Spanish market

The main role of the external auditor in the classical corporate governance scheme is to verify the accounting information provided by the firms' managers. Lengthy audit engagements are viewed as a main threat to preserve auditor independence, and therefore regulators have established mandatory...

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Autores principales:	García Blandón,Josep, Argilés Bosch,Josep Maria
Lenguaje:	English
Publicado:	Universidad de Chile. Departamento de Economía 2013
Materias:	Auditor independence qualified opinion auditor tenure audit quality
Acceso en línea:	http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0718-52862013000200002
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spelling	oai:scielo:S0718-528620130002000022014-04-28Audit tenure and audit Qualifications in a low litigation risk setting: An analysis of the Spanish marketGarcía Blandón,JosepArgilés Bosch,Josep Maria Auditor independence qualified opinion auditor tenure audit quality The main role of the external auditor in the classical corporate governance scheme is to verify the accounting information provided by the firms' managers. Lengthy audit engagements are viewed as a main threat to preserve auditor independence, and therefore regulators have established mandatory rotation rules in many countries worldwide. Researchers, however, have addressed the analysis of audit independence mainly by evaluating the role of the auditor not as an accounting verifier but as a substitute of bankruptcy prediction models. Our results show that the likelihood of audit qualifications decreases with audit tenure. This result is robust to the inclusion in the model of a proxy of accounting quality. Therefore, the potential explanation for this finding based on higher accounting quality associated to lengthy audit engagements is rejected. This threat to the independence of the external auditor has not been considered in the mandatory rotation rules established in most countries that only requires the rotation of the audit partner.info:eu-repo/semantics/openAccessUniversidad de Chile. Departamento de EconomíaEstudios de economía v.40 n.2 20132013-12-01text/htmlhttp://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0718-52862013000200002en10.4067/S0718-52862013000200002
institution	Scielo Chile
collection	Scielo Chile
language	English
topic	Auditor independence qualified opinion auditor tenure audit quality
spellingShingle	Auditor independence qualified opinion auditor tenure audit quality García Blandón,Josep Argilés Bosch,Josep Maria Audit tenure and audit Qualifications in a low litigation risk setting: An analysis of the Spanish market
description	The main role of the external auditor in the classical corporate governance scheme is to verify the accounting information provided by the firms' managers. Lengthy audit engagements are viewed as a main threat to preserve auditor independence, and therefore regulators have established mandatory rotation rules in many countries worldwide. Researchers, however, have addressed the analysis of audit independence mainly by evaluating the role of the auditor not as an accounting verifier but as a substitute of bankruptcy prediction models. Our results show that the likelihood of audit qualifications decreases with audit tenure. This result is robust to the inclusion in the model of a proxy of accounting quality. Therefore, the potential explanation for this finding based on higher accounting quality associated to lengthy audit engagements is rejected. This threat to the independence of the external auditor has not been considered in the mandatory rotation rules established in most countries that only requires the rotation of the audit partner.
author	García Blandón,Josep Argilés Bosch,Josep Maria
author_facet	García Blandón,Josep Argilés Bosch,Josep Maria
author_sort	García Blandón,Josep
title	Audit tenure and audit Qualifications in a low litigation risk setting: An analysis of the Spanish market
title_short	Audit tenure and audit Qualifications in a low litigation risk setting: An analysis of the Spanish market
title_full	Audit tenure and audit Qualifications in a low litigation risk setting: An analysis of the Spanish market
title_fullStr	Audit tenure and audit Qualifications in a low litigation risk setting: An analysis of the Spanish market
title_full_unstemmed	Audit tenure and audit Qualifications in a low litigation risk setting: An analysis of the Spanish market
title_sort	audit tenure and audit qualifications in a low litigation risk setting: an analysis of the spanish market
publisher	Universidad de Chile. Departamento de Economía
publishDate	2013
url	http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0718-52862013000200002
work_keys_str_mv	AT garciablandonjosep audittenureandauditqualificationsinalowlitigationrisksettingananalysisofthespanishmarket AT argilesboschjosepmaria audittenureandauditqualificationsinalowlitigationrisksettingananalysisofthespanishmarket
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Audit tenure and audit Qualifications in a low litigation risk setting: An analysis of the Spanish market

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