Does auditor tenure influence the reporting of conservative earnings?
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.
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 references are entirely missing, you can add them using this form.