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- Title
Auditor Characteristics and Early Accounting Error Detection: Evidence from Financial Restatements.
- Authors
Shin, Haeyoung; Randall Zhaohui Xu; Lacina, Michael
- Abstract
We investigate auditor attributes that may help determine the time it takes auditors to detect and have clients correct financial statement misstatements. The attributes include auditor tenure, client importance, and auditor industry specialization. We find that the length of the restatement period is positively associated with auditor tenure. However, this positive relationship applies only to the pre-Sarbanes Oxley Act period. The results imply that regulation imposed by Sarbanes Oxley has helped mitigate the impairment from long auditor tenure on auditors' ability to make timely detection and correction of improper accounting. Thus, mandatory auditor rotation may not be needed.
- Subjects
UNITED States; ACCOUNTING errors; FINANCIAL statements; UNITED States. Sarbanes-Oxley Act of 2002; AUDITORS
- Publication
Journal of Accounting & Finance (2158-3625), 2011, Vol 11, Issue 3, p36
- ISSN
2158-3625
- Publication type
Article