Journal article
The Determinants and Effects of Clients Following Audit Partners Who Switch Audit Firms
The European accounting review, v 28(3), pp 541-571
27 May 2019
Abstract
We examine the determinants of clients' decision to follow departing partners to new audit firms and the effect of this decision on the likelihood of financial restatements. Using Taiwanese audit partner turnover data from 1984 to 2010, we find that clients are more likely to follow departing partners when the partners have more clients, longer tenure, and when both lead and concurring partners leave simultaneously. By contrast, clients are more likely to stay with their incumbent audit firms when the firms are one of the Big Four or when only the concurring partners leave. The extended partner tenure due to clients following departing partners, however, does not enhance audit quality. In fact, clients that stay at the incumbent firm experience a significant decrease in the probability of financial restatements in the first year after the audit partners leave, but clients that follow do not.
Metrics
Details
- Title
- The Determinants and Effects of Clients Following Audit Partners Who Switch Audit Firms
- Creators
- Wen-Ching Chang - National Changhua University of EducationHiu Lam Choy - Drexel UniversityHuey-Yeh Lin - National Formosa UniversityMeihua Koo - California State Polytechnic University
- Publication Details
- The European accounting review, v 28(3), pp 541-571
- Publisher
- Routledge
- Grant note
- NSC 101-2410-H-018-007 / Ministry of Science and Technology, Taiwan (10.13039/501100004663)
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Accounting
- Web of Science ID
- WOS:000468187600005
- Scopus ID
- 2-s2.0-85052311962
- Other Identifier
- 991019168647504721
InCites Highlights
Data related to this publication, from InCites Benchmarking & Analytics tool:
- Collaboration types
- Domestic collaboration
- International collaboration
- Web of Science research areas
- Business, Finance