The timing of auditor hiring: Determinants and consequences
SYNOPSIS: Regulators and legislators have long been interested in the auditor change process and in auditors’ learning curves. We find that auditor changes closer to the year-end are associated with longer reporting lags and lower audit quality. We find that both audit fees and audit report lags are higher when there is a hiring lag between announcements of the predecessor auditor’s dismissal and the hiring of the successor auditor. We also find that the appointment of new executives is associated with the timing of the auditor change, suggesting that client executives have a significant role in the auditor-hiring process.
Pacheco-Paredes, Angel Arturo; Rama, Dasaratha V.; and Wheatley, Clark M., "The timing of auditor hiring: Determinants and consequences" (2017). Business Faculty Publications. 136.