تلخیص
This study aims at examining the impact of auditor tenure on
audit-quality, moreover, to observe whether the mandatory
auditor-rotation will result in enhancement of audit quality.
Data for the period covering 10 years (2005 till 2014) is
gathered from the audited financial statements after selecting
121 companies related to non-financial sector listed in
Pakistan Stock Exchange. Discretionary accruals calculated
with the help of MJ Model 1991, have been used as a proxy
to calculate the quality of audit. It is observed that during the
early years of auditor tenure the magnitude of discretionary
accruals increases, for the reason that the auditors are not
equipped with required client-specific knowledge. Once the
auditors acquire client-specific knowledge, the magnitude of
discretionary accruals decreases, resulting in an increase in
audit quality. Based on the findings of this study, it is derived
that the lengthy auditor tenure does not result in a decrease in
audit quality in the case of Pakistani non-financial sector
organizations. The outcomes of the study suggest that the
regulators and standards setters in Pakistan should reconsider
their policy regarding mandatory-auditor-client relationship
tenure.
Zohair Farooq Malik, Noman Arshed, Dr. Muhammad Shahid Hassan, Burhan Rasheed, Syed Taha Fraz Haider Kazmi, Muhammad Gulzar. (2017) The Impact of Auditor Tenure on Audit Quality: Evidence from Pakistan, Paradigms , Vol 11, Issue 2 .
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