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The effect of mandatory audit firm rotation on audit quality, audit fees and audit industry concentration: Evidence from India

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Issue DateTitleSub-TitleAuthor(s)Journal NameVolume NumberIssue NumberPages
125-Mar-2019The effect of mandatory audit firm rotation on audit quality, audit fees and audit industry concentration: Evidence from India-Narayanaswamy, R 

Description

Abstract
Mandatory audit firm rotation is potentially an important tool to strengthen auditor independence, enhance audit quality, increase audit market competition, reduce auditing cost, and compensate for India’s serious institutional deficiencies. India presents a mix of weak law enforcement, dominance of family-owned enterprises, rapid economic growth, growing two-way international trade and investment, strong common law traditions and independent judiciary, and zero shareholder litigation against auditors and directors. Audit firm rotation is a unique experiment to understand how businesses and auditors respond to market, legal and reputation considerations in such a setting. India provides an interesting setting to study whether rotation can help in improving the standards of auditing. This paper is related to previous research on mandatory audit firm rotation in other countries (e.g. Kwon, Lim, and Simnett 2014; Huang, Raghunandan, Huang, and Chiou 2015; Cameran, Francis, Marra, and Pettinicchio 2015; Corbella, Florioa, Gottib, and Mastrolia 2015). Please see the draft paper with preliminary results attached for more information.
 
Keyword(s)
Audit
Audit firm rotation
Audit quality

Primary Data

Project title
The effect of mandatory audit firm rotation on audit quality, audit fees and audit industry concentration: Evidence from India
Project Coordinator
Organization
 
Status
Completed
Expected Completion
25-03-2019