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The impact of public accountant firm size, audit opinion, audit delay, and financial distress on audit switching
Abstract
The issue of independence is a major focus in the auditing literature. This is what led to the birth of audit rotation regulations. However, it turns out that there are several companies in the insurance and bank sectors carrying out auditor switching outside the regulations regarding this rotation. Voluntary auditor switching has an impact on market and shareholder perceptions of firm stability. It may also entail substantial transition costs. For this reason, researchers want to examine further what factors cause auditor switching. The research results show that the dimension of the firm of public accountants and audit opinion negatively impact auditor switching. Meanwhile, audit delay and financial distress positively impact auditor switching. Thus, clients are more likely to stick with auditors who have a good reputation and perform thorough audits. To keep clients, accounting firms, especially smaller ones, should focus on providing high-quality audits and building a strong reputation.
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DOI: http://dx.doi.org/10.33021/jaaf.v8i1.5186
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