The joint effects of partner rotation and allocation of audit hours on audit quality

IF 2.8 3区 管理学 Q2 BUSINESS, FINANCE Managerial Auditing Journal Pub Date : 2023-08-07 DOI:10.1108/maj-04-2023-3892
Min-Hyo Kang, Sangil Kim, Ho-Young Lee
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Abstract

Purpose This study aims to examine the effects of allocation of audit hours to year-round audits and audit partners on audit quality when a new partner is appointed. Design/methodology/approach Using proprietary data of partners’ names and audit hours in the year-round context, the authors build a model testing input factors related to audit production and new partner assignment in 1,209 Korean listed firms during the period of 2015–2018. Findings The results show that in the partner rotation, the more audit hours spent, the more audit hours are allocated to the year-round audit, or more nonpartners’ audit hours are allocated to the year-round audit, the higher the audit quality. Subsample analyses show that these findings are concentrated in firms with longer audit tenure or low audit risk. Research limitations/implications The findings may provide regulatory authorities with practical guidelines concerning partner rotation and how to allocate audit hours to different audit stages and ranks (partner vs staff). Originality/value To the best of the authors’ knowledge, this study provides the first evidence of the joint effects of partner rotation and audit hour allocation on audit quality.
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合伙人轮换与审计时数分配对审计质量的共同影响
目的本研究旨在探讨在任命新合伙人时,全年审计人员和审计合伙人的审计时数分配对审计质量的影响。设计/方法/方法使用全年合伙人姓名和审计时间的专有数据,作者建立了一个模型,测试了2015-2018年期间1209家韩国上市公司与审计生产和新合伙人分配相关的输入因素。结果表明,在合伙人轮转中,花费的审计时数越多,分配给全年审计的审计时数越多,或者分配给全年审计的非合伙人审计时数越多,审计质量越高。子样本分析表明,这些发现集中在审计任期较长或审计风险较低的公司。研究的局限性/意义研究结果可能为监管机构提供有关合伙人轮岗以及如何将审计时间分配给不同审计阶段和级别(合伙人与员工)的实用指南。原创性/价值据作者所知,本研究首次提供了合伙人轮换和审计时间分配对审计质量共同影响的证据。
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来源期刊
CiteScore
5.40
自引率
13.80%
发文量
45
期刊介绍: The key areas addressed are: ■Audit and Assurance (financial and non-financial) ■Financial and Managerial Reporting ■Governance, controls, risks and ethics ■Organizational issues including firm cultures, performance and development In addition, the evaluation of changes occurring in the auditing profession, as well as the broader fields of accounting and assurance, are also explored. Debates concerning organizational performance and professional competence are also covered.
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