IDEAS home Printed from https://ideas.repec.org/a/taf/oabmxx/v6y2019i1p1695403.html
   My bibliography  Save this article

Audit firm rotation and audit quality: Comparison before vs after the elimination of audit firm rotation regulations in Indonesia

Author

Listed:
  • Inas Aisyah Widyaningsih
  • Iman Harymawan
  • Agus Widodo Mardijuwono
  • Eka Sari Ayuningtyas
  • Dyah Ayu Larasati

Abstract

This paper examines whether the changes in audit rotation policy affect the relationship between audit firm rotation and audit quality in Indonesia. This study uses 2,403 observations from 371 firms listed on the IDX for the period 2010–2017. This study uses Ordinary Least Squares regression to test the hypothesis. We find that, in the mandatory audit rotation period (pre-period), there is no significant association between audit rotation and audit quality. Interestingly, we find a positive relationship between audit rotation and audit quality in the voluntary audit rotation (post-period). Our result implies that voluntary audit rotation without any coercive regulation is more effective in improving audit quality. This research provides an insight to policy makers that eliminating the regulation of audit firm rotation is an effective decision to enhance audit quality.

Suggested Citation

  • Inas Aisyah Widyaningsih & Iman Harymawan & Agus Widodo Mardijuwono & Eka Sari Ayuningtyas & Dyah Ayu Larasati, 2019. "Audit firm rotation and audit quality: Comparison before vs after the elimination of audit firm rotation regulations in Indonesia," Cogent Business & Management, Taylor & Francis Journals, vol. 6(1), pages 1695403-169, January.
  • Handle: RePEc:taf:oabmxx:v:6:y:2019:i:1:p:1695403
    DOI: 10.1080/23311975.2019.1695403
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/23311975.2019.1695403
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1080/23311975.2019.1695403?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

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

    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:taf:oabmxx:v:6:y:2019:i:1:p:1695403. 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: Chris Longhurst (email available below). General contact details of provider: http://cogentoa.tandfonline.com/OABM20 .

    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.