Predicting Auditor Switches By Applying Data Mining
Auditor dismissals are considered to be a threat to audit quality. Several studies have examined auditor switches by applying typical statistical analysis. In the present study we deal with the auditor switching problem by applying data mining methodologies. Publicly available financial statement and auditing data are used as predictors. The optimum vector of significant input variables is defined by employing feature selection. A number of data mining classification methods are used to develop models capable of predicting the auditor change cases. The methods are compared against the widely used Logistic Regression. According to the results, all the data mining methods outperform Logistic Regression. Significant factors associated with auditor changes are revealed. The results can be useful to auditing firms, managers, investors, creditors and corporate regulators.
Volume (Year): 7 (2012)
Issue (Month): 3(21)/ Fall 2012 ()
|Contact details of provider:|| Web page: http://www2.spiruharet.ro/facultati/facultate.php?id=14|
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Johnson, W. Bruce & Lys, Thomas, 1990. "The market for audit services : Evidence from voluntary auditor changes," Journal of Accounting and Economics, Elsevier, vol. 12(1-3), pages 281-308, January.
- Mohammad Hudaib & T.E. Cooke, 2005. "The Impact of Managing Director Changes and Financial Distress on Audit Qualification and Auditor Switching," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 32(9-10), pages 1703-1739.
- Branson, Joel & Breesch, Diane, 2004. "Referral as a determining factor for changing auditors in the Belgian auditing market: An empirical study," The International Journal of Accounting, Elsevier, vol. 39(3), pages 307-326.
- DeAngelo, Linda Elizabeth, 1981. "Auditor size and audit quality," Journal of Accounting and Economics, Elsevier, vol. 3(3), pages 183-199, December.
- Krishnan, Jagan & Stephens, Ray G., 1995. "Evidence on opinion shopping from audit opinion conservatism," Journal of Accounting and Public Policy, Elsevier, vol. 14(3), pages 179-201.
- DeFond, Mark L. & Subramanyam, K. R., 1998. "Auditor changes and discretionary accruals," Journal of Accounting and Economics, Elsevier, vol. 25(1), pages 35-67, February.
- Lennox, Clive, 2000. "Do companies successfully engage in opinion-shopping? Evidence from the UK," Journal of Accounting and Economics, Elsevier, vol. 29(3), pages 321-337, June.
- David H. Sinason & Jefferson P. Jones & Sandra Waller Shelton, 2001. "An Investigation of Auditor and Client Tenure," American Journal of Business, Emerald Group Publishing, vol. 16(2), pages 31-40.
- repec:bla:joares:v:18:y:1980:i:1:p:109-131 is not listed on IDEAS
When requesting a correction, please mention this item's handle: RePEc:ush:jaessh:v:7:y:2012:i:3(21)_fall2012:p:246. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Laura Stefanescu)
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.