Mandatory Rotation of Auditors in Saudi Context: An Empirical Investigation of its Impact on Detecting Material Financial misstatements
Abstract:(1)
This Study aims at investigating the impact of the external auditor mandatory rotation on his ability to detect material misstatements in financial statements of significant variables associated positivity/negatively with mandatory rotation have been selected to test the study hypotheses.
The study uses a questionnaire to elicit opinions of a sample of auditors who are working in auditing firms in Saudi Arabia. The hypotheses were tested using various statistical tools. The results reveal that: (i) there is a relationship between the mandatory audit rotation and both of the following variables: properties of professional suspicion; learning curve; the professional independence; and the audit fees. (ii) the professional independence and the audit fees have a higher significant impact than other variables on auditors’ ability to detect financial misstatements.
The recommendations of this study are: (1) An extension of this study, the inclusion of other independent variables , It can also investigate other elicit opinions , corporation's Board , audit committees . (2) the professional bodies should manage training programs that enhance awareness of the adoption of auditors industry specialization within the mandatory rotation of auditors.
Keywords: Mandatory rotation of auditors, professional independence, professional skepticism, learning, audit fees.
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