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External rotation of the auditor

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  • Patrick Velte

Abstract

The European Commission (EC) discusses in her regulation draft of 2011 the external mandatory auditor rotation (audit firm rotation) principally after six years as a reform measure to increase auditor independence, which could complement the internal mandatory rotation (auditor rotation) by the 8th EC directive of 2006. First, the present short survey paper contains a theoretical foundation of audit firm rotation, whereby the influences on low balling will be discussed. Furthermore, the paper gives a review of the empirical auditor change research. In contrast to the perception of the EC, the empirical results mainly don’t state an increased financial accounting and audit quality by an external rotation of the auditor. Copyright Springer Verlag 2012

Suggested Citation

  • Patrick Velte, 2012. "External rotation of the auditor," Metrika: International Journal for Theoretical and Applied Statistics, Springer, vol. 23(1), pages 81-91, September.
    • Handle: RePEc:spr:metrik:v:23:y:2012:i:1:p:81-91
    DOI: 10.1007/s00187-012-0149-8
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    References listed on IDEAS

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    Cited by:

    1. Patrick Velte & Carl-Christian Freidank, 2015. "The link between in- and external rotation of the auditor and the quality of financial accounting and external audit," European Journal of Law and Economics, Springer, vol. 40(2), pages 225-246, October.
    2. Florio, Cristina, 2024. "A structured literature review of empirical research on mandatory auditor rotation," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 55(C).

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