Journal article
An Analysis of Forced Auditor Change: The Case of Former Arthur Andersen Clients
The Accounting review, v 82(3), pp 621-650
01 May 2007
Abstract
This study examines former Arthur Andersen clients and provides evidence on the factors involved in their selection of new auditors after Andersen's collapse. Using a unique dataset that identifies whether former Andersen clients followed their audit team to a new auditor, findings reveal companies with greater agency concerns were more likely to sever ties with their former auditor, whereas those with greater switching costs were more likely to follow their former auditor. We also investigate the effect of the forced auditor change on financial statement quality in an effort to provide insight into the mandatory auditor rotation debate. Using performance-adjusted discretionary accruals as a proxy for reporting quality, our results fail to reveal significant improvements for companies with extreme discretionary accruals that severed ties with Andersen, which is inconsistent with the notion that mandatory rotation improves financial reporting.
Metrics
Details
- Title
- An Analysis of Forced Auditor Change: The Case of Former Arthur Andersen Clients
- Creators
- Jennifer Blouin - University of PennsylvaniaBarbara Murray Grein - Drexel UniversityBrian R. Rountree - Rice University
- Publication Details
- The Accounting review, v 82(3), pp 621-650
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Accounting
- Web of Science ID
- WOS:000246863400003
- Scopus ID
- 2-s2.0-34250777851
- Other Identifier
- 991019312354804721
InCites Highlights
Data related to this publication, from InCites Benchmarking & Analytics tool:
- Collaboration types
- Domestic collaboration
- Web of Science research areas
- Business, Finance