Journal of Finance and Accounting

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The External Auditor Mandatory Changes Impact on Improving the Quality of the Auditing Process

Received: 06 December 2014    Accepted: 25 December 2014    Published: 04 January 2015
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Abstract

This study identifies the effect of mandatory rotation of the external auditor in improving the quality of auditing and to confirm his objectivity and independence. A questionnaire has been designed and distributed to a sample of 185 external auditors and managers of corporation at Gaza. The study introduces many results; e. i, there is a relationship of applying the mandatory and its effect on the quality, cost and audit fees, and to improve the quality of auditing and to confirm his objectivity and independence. The study introduces many recommendations; e. g., applying the professional specialization strategy in the client's industry.

DOI 10.11648/j.jfa.20140206.12
Published in Journal of Finance and Accounting (Volume 2, Issue 6, November 2014)
Page(s) 129-133
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Mandatory Rotation, External Editor, Quality of Auditing, Independence

References
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[8] W. R. Knechel, and A. Vanstraelen, “The relationship between auditor tenure and audit quality implied by going concern opinions,” Auditing: A Journal of Practice and Theory, vol. 26, pp. 113-131, 2007.
[9] J. N. Myers, L. A. Myers, Z. Palmrose, S. Scholz, “Mandatory Auditor Rotation: Evidence from Restatements,” University of Illinois at Urbana-Champaign, 2013.
[10] M. Schelker, “Auditors and corporate governance: Evidence from the public sector,” Kyklos, vol. 66, pp. 275–300, 2013.
[11] V. Mande and M. Son, “Do Financial Restatements Lead to Auditor Changes?” Auditing: A Journal of Practice & Theory, vol. 32, pp. 119-145, 2012.
[12] J. Stanley, T. Dezoort, “Audit firm tenure and financial restatements, an analysis of industry specialization and fee effects,” Journal of Accounting and Public Policy, vol. 26, pp. 131–159, 2007.
[13] S. R. Al Koni, “The conditions of the auditing profession in Palestine: the current realities and change requirements, ” Research Report Series, No. 21, Center for Private Sector Development-Palestinian Businessmen Association-Jerusalem, 2004, http://blogs.najah.edu/staff/saed-koni/article/article.
[14] A. Ghosh, and D. Moon, “Does auditor tenure impair audit quality,” Working Paper. Office of Economic Analysis, 2003.
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[16] S. A. Mansi, W. F. Maxwell, and D. P. Miller, “Does auditor quality and tenure matter to investors? Evidence from the bond market,” Journal of accounting Research, vol. 42, pp. 755-793, 2004.
[17] J. V. Carcello, and A. L. Nagy, “Client size, auditor specialization and fraudulent financial reporting,” Managerial Auditing Journal, vol. 19, pp. 651-668, 2004.
[18] D. Manry, T. Mock, and J. Turner, “Does increased audit partner tenure reduce audit quality?” Journal of Accounting, Auditing and Finance, vol. 23, pp. 553-572, 2008.
[19] G. Bae, S. Kallapur, J. Rho, “Departing and Incoming Auditor Incentives, and Auditor-Client Misalignment under Mandatory Auditor Rotation: Evidence from Korea,” Available at SSRN 2281127, 2013.
[20] R. L. Davis, B. Soo and G. “Trompeter, Auditor tenure and the ability to meet or beat earnings forecasts.” Contemporary Accounting Research, vol. 26, pp. 517-548, 2009.
[21] P. Carey, R. Simnett, “Audit partner tenure and audit quality,” The Accounting Review, vol. 81, pp. 653-676, 2006.
[22] F, Gul, B. Jaggi, G. Krishnan, “Auditor independence, evidence on the joint effects of auditor tenure and non-audit fees,” Auditing: A Journal of Practice and Theory, vol. 26, pp. 117-142, 2007.
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[26] A. J. Al-Khozondar, The impact of the mandatory changes for the external auditor in improving the quality of the review process and strengthen the objectivity and independence. Unpublished thesis. Islamic University of Gaza, 2008.
Author Information
  • Auditing Department, Palestinian Monetary Authority, Gaza, Palestine

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    Ayah Jarallah El-Khozondar. (2015). The External Auditor Mandatory Changes Impact on Improving the Quality of the Auditing Process. Journal of Finance and Accounting, 2(6), 129-133. https://doi.org/10.11648/j.jfa.20140206.12

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    ACS Style

    Ayah Jarallah El-Khozondar. The External Auditor Mandatory Changes Impact on Improving the Quality of the Auditing Process. J. Finance Account. 2015, 2(6), 129-133. doi: 10.11648/j.jfa.20140206.12

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    AMA Style

    Ayah Jarallah El-Khozondar. The External Auditor Mandatory Changes Impact on Improving the Quality of the Auditing Process. J Finance Account. 2015;2(6):129-133. doi: 10.11648/j.jfa.20140206.12

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  • @article{10.11648/j.jfa.20140206.12,
      author = {Ayah Jarallah El-Khozondar},
      title = {The External Auditor Mandatory Changes Impact on Improving the Quality of the Auditing Process},
      journal = {Journal of Finance and Accounting},
      volume = {2},
      number = {6},
      pages = {129-133},
      doi = {10.11648/j.jfa.20140206.12},
      url = {https://doi.org/10.11648/j.jfa.20140206.12},
      eprint = {https://download.sciencepg.com/pdf/10.11648.j.jfa.20140206.12},
      abstract = {This study identifies the effect of mandatory rotation of the external auditor in improving the quality of auditing and to confirm his objectivity and independence. A questionnaire has been designed and distributed to a sample of 185 external auditors and managers of corporation at Gaza. The study introduces many results; e. i, there is a relationship of applying the mandatory and its effect on the quality, cost and audit fees, and to improve the quality of auditing and to confirm his objectivity and independence. The study introduces many recommendations; e. g., applying the professional specialization strategy in the client's industry.},
     year = {2015}
    }
    

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