The Effects of mandatory audit firm rotation on client importance and audit industry concentration
Research investigating the effects of Mandatory Audit Rotation (MAR) on the structure of the audit market and client importance which looks at the question of whether prescribing MAR actually has the envisaged effects.
The article discusses developments in the statutory audit services market, particularly in Great Britain, as of July 2016. Also cited are the changes to the Corporate Governance Code in the country, the 2014 Audit Regulation & Directive (ARD) issued by the European Union (EU), the guidance on how to best manage an audit tender, and the factors that affect the selection of audit firms like commercial confidentiality.
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Assurance news: Rotation leading to lower audit fees in Europe
The U.S. Public Company Accounting Oversight Board (PCAOB) had been considering requiring mandatory audit firm rotation, but has been discouraged by a European trend towards lower audit fees since the European Parliament approved mandatory rotation. Audit fees seem to have dropped between 20-40% in Europe - with the UK being an exception to this.
Articles and books in the Library collection
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Scaling the FTSE 100
Accountancy, November 2014, pages 8-14
The Big Four still have a firm hold on the top 100 audtis but mid-tier firms are trying hard to ensure a fair contest. Includes the table FTSE 100 auditors survey 2013/14, tables companies ranked by audit value; constituent members FTSE 100 (in/out) and post-annual report auditor switches.
Does corporate tax aggressiveness influence audit pricing?
Contemporary Accounting Research, Spring 2014, pages 84-308
The authors evaluate whether, and under what circumstances, corporate tax aggressiveness influences audit pricing. Using a compound measure of two long-run effective tax rates, they find that tax-aggressive firms pay higher fees for external audit services after controlling for factors related to earnings management. Overall, the evidence implies firms' aggressive tax behaviour, tax services provider, and auditor expertise interact to influence the pricing of auditing engagements.
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