IDEAS home Printed from https://ideas.repec.org/a/eee/jappol/v27y2008i2p115-132.html
   My bibliography  Save this article

Does auditor tenure influence the reporting of conservative earnings?

Author

Listed:
  • Jenkins, David S.
  • Velury, Uma

Abstract

In this study, we examine the relation between auditor tenure and the reporting of conservative earnings. Using several measures of conservatism, we document a positive association between the conservatism in reported earnings and the length of the auditor-client relationship. We further document an increase in conservatism between short and medium tenure that does not deteriorate over long tenure. Collectively, the results imply lower conservatism for short auditor tenure, which suggests that mandating auditor rotation may have an adverse affect on the conservatism in reported earnings.

Suggested Citation

  • Jenkins, David S. & Velury, Uma, 2008. "Does auditor tenure influence the reporting of conservative earnings?," Journal of Accounting and Public Policy, Elsevier, vol. 27(2), pages 115-132.
    • Handle: RePEc:eee:jappol:v:27:y:2008:i:2:p:115-132
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0278-4254(08)00018-5
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mai Dao & Hassan R. HassabElnaby & Amal Said, 2015. "The Impact of Audit Committee and Shareholder Activism on the Association between Audit-Firm Tenure and Accounting Conservatism," Accounting and Finance Research, Sciedu Press, vol. 4(1), pages 112-112, February.
    2. Daniel Badulescu & Muhammad Nouman Akhtar & Mumtaz Ahmad & Mariam Abbas Soharwardi, 2021. "Accounting Policies, Institutional Factors, and Firm Performance: Qualitative Insights in a Developing Country," JRFM, MDPI, vol. 14(10), pages 1-20, October.
    3. Johnathon Cziffra & Steve Fortin & Zvi Singer, 2023. "Differences in government accounting conservatism across jurisdictions, their determinants, and consequences: the case of Canada and the United States," Review of Accounting Studies, Springer, vol. 28(2), pages 1035-1073, June.
    4. Tobias Svanstr�m, 2013. "Non-audit Services and Audit Quality: Evidence from Private Firms," European Accounting Review, Taylor & Francis Journals, vol. 22(2), pages 337-366, June.
    5. Garcia-Blandon, Josep & Argiles-Bosch, Josep Maria & Castillo-Merino, David & Martinez-Blasco, Monica, 2017. "An Assessment of the Provisions of Regulation (EU) No 537/2014 on Non-audit Services and Audit Firm Tenure: Evidence from Spain," The International Journal of Accounting, Elsevier, vol. 52(3), pages 251-261.
    6. Nikolaos Anastasopoulos & Dimitrios Asteriou, 2021. "Optimal dynamic auditing based on game theory," Operational Research, Springer, vol. 21(3), pages 1887-1912, September.
    7. Casterella, Jeffrey R. & Johnston, Derek, 2013. "Can the academic literature contribute to the debate over mandatory audit firm rotation?," Research in Accounting Regulation, Elsevier, vol. 25(1), pages 108-116.
    8. Chi, Wuchun & Wang, Chenchin, 2010. "Accounting conservatism in a setting of Information Asymmetry between majority and minority shareholders," The International Journal of Accounting, Elsevier, vol. 45(4), pages 465-489, December.
    9. Shaw, Kenneth W. & Whitworth, James D., 2022. "Client importance and unconditional conservatism in complex accounting estimates," Advances in accounting, Elsevier, vol. 58(C).
    10. Bryan, David B. & Mason, Terry W., 2017. "Executive tournament incentives and audit fees," Advances in accounting, Elsevier, vol. 37(C), pages 30-45.
    11. Gabbioneta, Claudia & Greenwood, Royston & Mazzola, Pietro & Minoja, Mario, 2013. "The influence of the institutional context on corporate illegality," Accounting, Organizations and Society, Elsevier, vol. 38(6), pages 484-504.
    12. Firth, Michael & Rui, Oliver M. & Wu, Xi, 2012. "How Do Various Forms of Auditor Rotation Affect Audit Quality? Evidence from China," The International Journal of Accounting, Elsevier, vol. 47(1), pages 109-138.
    13. Anastasopoulos, Nikolaos P. & Anastasopoulos, Markos P., 2012. "The evolutionary dynamics of audit," European Journal of Operational Research, Elsevier, vol. 216(2), pages 469-476.
    14. Jeong-Bon Kim & Byron Song & Judy Tsui, 2013. "Auditor size, tenure, and bank loan pricing," Review of Quantitative Finance and Accounting, Springer, vol. 40(1), pages 75-99, January.
    15. Bryan, David B. & Mason, Terry W., 2020. "Earnings volatility and audit report lag," Advances in accounting, Elsevier, vol. 51(C).
    16. TINA M. Jose Vega & Dennis M. López, 2012. "Evaluating The Effect Of Industry Specialist Duration On Audit Quality And Audit Fees," Working Papers 0023, College of Business, University of Texas at San Antonio.
    17. Sun, Yan & Xu, Weihong, 2012. "The role of accounting conservatism in management forecast bias," Journal of Contemporary Accounting and Economics, Elsevier, vol. 8(2), pages 64-77.
    18. Corbella, Silvano & Florio, Cristina & Gotti, Giorgio & Mastrolia, Stacy A., 2015. "Audit firm rotation, audit fees and audit quality: The experience of Italian public companies," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 25(C), pages 46-66.
    19. Dafydd Mali & Hyoung‐joo Lim, 2018. "Conservative Reporting and the Incremental Effect of Mandatory Audit Firm Rotation Policy: A Comparative Analysis of Audit Partner Rotation vs Audit Firm Rotation in South Korea," Australian Accounting Review, CPA Australia, vol. 28(3), pages 446-463, September.
    20. Mehmet nsal Memis & Emin H seyin Cetenak, 2012. "Earnings Management, Audit Quality and Legal Environment: An International Comparison," International Journal of Economics and Financial Issues, Econjournals, vol. 2(4), pages 460-469.
    21. Ajaz Ul Islam, 2020. "Do Shareholder Activism Effect Corporate Governance and Related Party Transactions: Evidences from India?," Indian Journal of Corporate Governance, , vol. 13(2), pages 165-189, December.
    22. Zhang, Min & Xu, Haoran & Li, Xu, 2017. "The Effect of Previous Working Relationship between Rotating Partners on Mandatory Audit Partner Rotation," The International Journal of Accounting, Elsevier, vol. 52(2), pages 101-121.
    23. Rajat Deb & Mukesh Nepal & Sourav Chakraborty, 2023. "IFRS and Audit Quality: A Systematic Literature Review," Management and Labour Studies, XLRI Jamshedpur, School of Business Management & Human Resources, vol. 48(1), pages 118-138, February.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jappol:v:27:y:2008:i:2:p:115-132. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jaccpubpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.