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Identifier to cite or link to this item: https://hdl.handle.net/10086/25524

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Title
Audit Firm Switch and Engagement Partner Continuance
Creator
Creator Name
Fukukawa, Hironori Fukukawa, Hironori
福川, 裕徳 福川, 裕徳
Affiliation
Affiliation Name
Hitotsubashi University
Creator Name
Karube, Masaru Karube, Masaru
軽部, 大 軽部, 大
Affiliation
Affiliation Name
Hitotsubashi University
Key Word
Audit firm switch
Engagement partner continuance
Audit fees
Abstract
This study examines how audit fees change when companies switch audit firms. In particular, we are interested in the effect of engagement partners’ familiarity with clients on the changes in audit fees. On the basis of the unique data on individual engagement partners obtained from auditors’ reports in Japan, this study uses a more direct measure of partner.client familiarity than previous studies. By identifying engagement partners on both final and initial audits, we find that when audit fees increase after an audit firm switch, the ratio of engagement partners on initial audits who had been involved with the client before the switch has a negative impact on the increase in audit fees. On the other hand, when audit fees do not increase, no significant relationship is found between them. Furthermore, this study provides some evidence on the effect of the demise of ChuoAoyama, which was one of the Big 4 firms in Japan.
Description
Data used in this study are obtainable from public sources.
Publisher
Institute of Innovation Research, Hitotsubashi University
Issued Date
2013-03
Language
English(eng)
Resource Type
technical report
Version Type
VoR
Is Part OfRelation -
Related Title
IIR Working Paper ; No. 13-05
Number of Pages
27
Appears in Collections
IIR Working Paper
URL
https://hdl.handle.net/10086/25524