Factors Affecting Auditor Choice and Auditor Change in Spanish Firms
Factores que Condicionan la Elección y el Cambio de Auditor en la Empresa Española
Abstract
There are several factors that influence, in different ways, the decision to choose and change an auditor. Even though empirical research seeking to determine these factors has been carried out in other countries, until now there have no studies in Spain seeking to show which variables affect both decisions and with what degree of significance. This paper presents the results of an empirical analysis that brings together the assessments provided by 60 firms, responding to a questionnaire, of 41 possible factors to bear in mind when choosing and changing an auditor. The results obtained indicate, among other things, that factors such as technical characteristics of the auditing service and the public prestige of the audit firm are predominant in choosing an auditor. As regards the decision to change auditors, however, the relationship between firm and auditor is particularly influential.
Downloads
-
Abstract435
-
PDF (Español (España))485
References
AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS (AICPA) (1978): Report Conclusions and Recommendations of The Commission on Auditor's Responsibilities (Cohen Comission), AICPA, Nueva York. Re-impreso en Journal of Accountancy, April, p. 92-102.
ANDERSON, D.; STOKES, D. y ZIMMER, I. (1993): "Corporate Takeovers and Auditors Switching", Auditing: A Journal of Practice & Theory, Vol. 12, No. 1, p. 65-73.
ARRUÑADA, B. (1997): La calidad de la auditoría. Incentivos privados y regulación, Marcial Pons, Madrid.
BALVERS, R.; MCDONALD, B. y MILLER, R. (1988): "Underpricing of New Issues and the Choice of Auditor as a Signal of Investment Banker Reputation", The Accounting Revíew, No. 4, p. 605-622.
BEATTIE, V. A. y FEARNLEY, S. (1995): "The Importance of Audit Firm Characteristics and the Drivers of Auditor Change in UK Listed Companies", Accountíng and Business Research, Vol. 20, No. 100, p. 227-239.
BEATTY, R. (1989): "Auditor Reputation and the Pricing of Initial Public Offerings", The Accounting Review, No. 4, p. 693-707.
BECK, P. J.; FRECKA, T. J. y SOLOMON, l. (1988): "A Model of the Market for MAS and Audit Services: Knowledge Spillovers and Auditor-Auditee Binding", Journal of Accounting Literature, p. 50-64.
BEDINGFIELD, J. y LOEB, S. (1974): "Auditor Changes-An Examination", Journal of Accounting, March, p. 66-69.
BURTON, J. y ROBERTS, W. (1967): "A Study of Auditor Changes", Journal of Accountancy, April, p. 31-36.
BUTTERWORTH, S. y HOUGHTON, K. (1995): "Auditor Switching: The Pricing of Audit Services", Journal of Business Finance & Acounting, Vol. 22, No. 3, p. 323-344.
CARPENTER, C. y STRAWSER, R. (1971): "Displacement of Auditors When Clients Go Public", Journal of Accountancy, p. 55-59.
CORONA ROMERO, E.; GARCÍA BENAU, M. A.; RUÍZ BARBADILLO, E. y VICO MARTÍNEZ, A. (1995): "The Audit Market in Spain. An Analysis of the Top 250 Non-Financial Companies", Paper presented at the European Accounting Congress, Birmingham.
CRASWELL, A. (1988): "The Association Between Qualified Opinions and Auditor Switches", Accounting and Business Research, No. 73, p. 23-31.
CHOW, CH. y RICE, S. (1982): "Qua!ified Audit Opinions and Auditor Switching", The Accounting Review, No. 2, p. 326-335.
CHRISTIANSEN, M. y LOFT, A. (1992): "Big Players and Small Players. A Study of Increasing Concentration in the Danish Market for Auditing Services", European Accounting Review, p. 277-301.
DAVIES, S. W. y LION, B. R. (1982): "Seller Concentration: The Technological Explanation and Demand Uncertainty", The Economic Journal, December, p. 903-919.
DANOS, P. y EICHENSEHER, J. (1986): "Long-Term Trends Toward Seller Concentration in the U.S.Audit Market", The Accounting Review, No. 4, p. 633-650.
DEANGELO, L. (1981): "Auditor Size and Audit Quality", Journal of Accounting and Economics, December, p. 183-199.
DEANGELO, L. (1982): "Mandated Succesful Efforts and Auditor Choice", Journal of Accounting and Economics, Vol. 4, p. 171-204.
DEFOND, E. M. (1992): "The Association Between Change in Client Firm Agency Costs and Auditor Switching", Auditing: A Journal of Practice & Theory, Vol. 11, No. 1, p. 16-31.
EICHENSEHER, J. y SHIELD, D. (1983): "The Correlates of CPA-Fiem Change for Publicly-Held Corporations", Auditing: A Journal of Practice: & Theory, p. 23-37.
EICHENSEHER, J.; HAGIGI, M. y SHIELD, D. (1989): "Market Reaction to Auditor Changes by OTC Companies", Auditing: A Journal of Practice & Theory, p. 29-40.
FRANCIS, J. R. (1984): 'The Effect of Audit Firm Size on Audit Prices, a Study of the Australian Market",Journal of Accowuing and Economics, Vol. 6, January, p. 133-151.
FRANCIS, J. R y WILSON, E. (1988): "Auditor Changes: A Joint Test of Theories Relating to Agency Cost and Auditor Differentation", The Accounting Review, No. 4, p. 663-682.
GARCIA BENAU, M. A.; HUMPREY, C.; MOIZER, P. y TURLEY, S. (1993): La Auditoría y sus expectativas: Los casos de España y el Reino Unido, ICAC, Madrid.
GARCIA BENAU, M. A.; RUIZ BARBADILLO, E. y VICO MARTÍNEZ, A. (1998): Análisis de la estructura del mercado de servicios de auditoría en España, ICAC, Madrid.
GARCIA BENAU, M. A.; GARRIDO, P.; VICO, A.; MOIZER, P. y HUMPREY, C. (1999): "La calidad del servicio de auditoría: los auditores vistos por sus clientes", Revista Española de Financiación y Contabilidad, nº l02.
GREGORY, A. y COLLIER, P. (1996): "Audit Fees and Auditor Change: An Investigation of the Persistence of Fee Reduction by Type of Change", Journal of Business Finance & Accounting, Vol. 23, No. 1, p. 13-28.
HASKINS, M y WILLIAMS, D. (1990): "A Contingent Model ofintra-Big Eight Auditor Changes", Auditing: A Journal ofPractice & Theory, Vol. 9, No. 3, p. 55-74.
HOGAN, C. E. (1997): "Costs and Benefits of Audit Quality in the IPO Market: A Self-Selection Analysis", The Accounting Review, Vol. 72, No. 1, p. 67-86.
JOHNSON, W. y LYS, T. (1990): "The Market for Audit Services-Evidence from Voluntary Auditor Changes", Journal of Accountancy and Economics, p. 281-301.
KANODIA, CH. y MUKHERJI, A. (1994): "Audit Pricing, Lowballing and Auditor Turnover: A Dynamic Analysis", The Accounting Review, October, p. 593-615.
KAPLAN, S.; MENON, K. y WILLIAMS, D. (1990): "The Effect of Audit Structure on the Audit Market", Journal of Accounting and Public Policy, p. 197-215.
KINNEY, W. (1986): "Audit Technology and Preferences for Auditing Standars", Journal of Accounting and Economics, No. 1, p. 73-89.
KLUGER, B. y SHIELDS, D. (1991): "Managerial Moral Hazard and Auditor Changes", Critical Perspectives on Accounting, No. 3, p. 255-272.
KRISHNAN, J. y STEPHENS, R. (1995): "Evidence on Opinion Shoping from Audit Opinions Conservatism", Journal of Accounting and Public Policy, No. 14, p. 179-201.
KRISHNAN, J. y STEPHENS, R. (1996): "The Simultaneous Relation Between Auditor Switching and Audit Opinion: An Empirical Analysis", Accounting and Business Research, Vol. 26, No. 3, p. 224-236.
MAGEE, R. P. y TSENG, M. (1990): "Audit Pricing and Independence", The Accounting Review. April, p. 315-336.
MARTEN, K. U. (1997): "Developments in Concentration on the German and European Audit Market", Comunicación presentada al Workshop on Auditor Regulation in Europe del ElASM, Copenhagen.
MENON, K. y WILLIAMS, D. (1991): "Auditor Credibility and InitiaJ Public Offerings", The Accountíng Review, No. 2, p. 313.
METCALF COMMITTEE (1976): Subcommittee on Reports, Accountíng and Management ofthe Committee on Govemmental Affairs, United States Senate. Re-impreso en The Journal of Accountancy, January 1978, p. 89-96.
MOCK, T. y SAMET, M. (1982): "A Multi-Attribute Model", Procceeding of the VI University of Kansas Audit Symposium.
MOIZER, P. y TURLEY, S. (1989): "Changes in the UK Market for Audit Services: 1972-1982", Journal of Business, Finance & Accounting, p. 41-53.
MUTCHLER, J. y WILLIAMS D. (1990): "The Relationship Between Audit Technology, Client Risk Profiles, and the Going-Concem Opinion",Auditing: A Journal of Practice & Theory, Vol. 9, No. 3, p. 39-54.
NERA (1992): Competition in European Accounting, National Economic Research Associates, Laffertty Publications, Dublin.
ORTEGA MARTÍNEZ (1990): Manual de Investigación Comercial, Pirámide, Madrid. PALMROSE, z. (1986): "Auditor Pees and Auditor Size: Further Evidence", Journal of Accounting Research, Spring, p. 97-110.
PONG, C. y WHITTINGTON, G. (1994): "The Determinants of Audit Pees: Sorne Empirical Models", Jounal of Business Finance & Accounting, Vol. 21, No. 8, p. l.071-1.045.
SCHWARTZ, K. y MENON, K. (1985): "Auditor Swítches by Pailing Firms", The Accounting Review, No. 2, p. 248-261.
SHROEDER, M.S.; SOLOMON, I. y VICKREY, D. (1986): "Audit Quality: The Perceptions of Audit-Committee Chairpersons and Audit Partners", Auditing: A Journal of Practice and Theory, Vol. 5, No. 2, p. 86-94.
SIEGEL, S. y CASTELLAN,. N. J. (1988): Non-Parametric Statistics for the behavíoural Sciences, McGraw Hill.
SIMON, D. y FRANCIS, J. (1987): "The Effects of Auditor Changes on Audit Fees: Tests of Price Cutting and Price Recovery", The Accounting Review, p. 255-269.
SIMON, D. y FRANCIS, J. (1988): "The Effects of Auditor Change on Audit Fees: Test of Price Cutting and Price Recovering", The Accounting Review, April, p. 255-269.
SIMUNIC, D. A. (1980): "The Pricing of Audit Services: Theory and Evidence", Journal of Accounting Research, Spring, p. 161-190.
SIMUNIC, D. A. (1984): "Auditing, Consulting and Auditor Independence", Journal of Accounting Research, Spring, p. 679-702.
SIMUNIC, D. A. y STEIN, M. (1987): "Product Differentation in Auditing: A Study of Auditor Choice in the Market for New Issues", Canadian certified General Accountant' Research Foundatíon, Monograph 13.
SMITH, D. (1986): "Auditor 'Subject To' Opinions, Disclaimer, and Auditor Changes", Auditing: A Journal of Practice & Theory, Vol. 6, No. 1, p. 95-108.
SUTTON, S. y LAMPE, J. (1990): "Formulating a Process Measurement System for Audít Quality", In Proceedings of the 1990 University of South California Audit Judyment Symposium.
TURPEN, R. (1990): "Differential Princing on Auditors's Initial Engagements: Further Evidence", Auditing: A Journal of Practice & Theory, Vol. 4, No. l, p. 60-76.
WATTS, R. y ZIMMERMAN, J. (1986): Positíve Accounting Theory, Prentice-Hall, New Jersey.
WILLIAMS, D. (1988): "The Potential Determinants of Auditor Changes", Journal of Business, Finance & Accounting, p. 243-261.
WILSON, E.; KHURANA, Y. y ALBRECHT, W. (1995): "Aditional Evidence on Auditor Changes: The Effects on Client Financial Condition", Advances in Accounting, Vol. 13, p. 153-168.
The publications in this journal are subject to the following terms:
1. Ediciones de la Universidad de Murcia (EDITUM) and ASEPUC conserve the patrimonial rights (copyright) of the published manuscripts, and favour and allow their reuse under the licence of use indicated in point 2.
2. The manuscripts are published in the electronic edition of the journal under an Attribution-NonCommercial-NoDerivatives 4.0 International licence. It allows to copy, distribute and include the article in a collective work (for example, an anthology), as long as there is no commercial purpose, the article is not altered or modified and the original work is properly cited. This journal is free of charge for the Open Access publication. ASEPUC and EDITUM finance the productiona and publication costs of the manuscripts.
3. Conditions for self-archiving. Authors are permitted and encouraged to electronically disseminate the published version of their works, as it favors their circulation and dissemination and thus a possible increase in their citation and reach among the academic community.
