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Audit Partner Rotation: Evidence of Changes in Audit Partner Tenure as the Result of Mandatory Regulation in Australia

Current Issues in Auditing 1 (1), A28 (2007);
doi: 10.2308/ciia.2007.1.1.A28

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Kirsty Ryken, Renee Radich, and Neil L. Fargher
Kirsty Ryken is aLecturer, Renee Radich is an Associate Professor, and Neil Fargher is a Professor, all at Macquarie University.
SYNOPSIS: This study examines rotation practices before and after the implementation of mandatory audit partner rotation policies in Australia. We focus on the incidence of long partner tenure. Despite prior voluntary rotation practices, the results suggest that: the introduction of mandatory rules in 2003 significantly reduced the incidence of long partner tenure; auditors in locations outside Australia's three major cities are likely to have longer audit partner tenure than those located in the major cities; and there is evidence of the differential impact of mandatory audit partner rotation on smaller audit firms. Future research could examine the need for reasonable exemptions to mandatory rotation requirements given the higher costs of partner rotation to smaller audit firms and to firms in remote locations. ©2007 American Accounting Association
History: Submitted 1 June 2007; accepted 8 September 2007; published 29 November 2007
Permalink: http://link.aip.org/link/CIAXXX/v1/i1/pA28/s1

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ISSN:
1936-1270 (online)
Publisher:
AIP is a member of CrossRef American Accounting Association

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