The Association between Auditor Tenure and Earnings Quality: Evidence from Non-Listed Public Companies in Taiwan

• Main Authors: Ya-Hui WU, 吳雅惠
• Other Authors: Min-Jeng Shiue
• Format: Others
• Language: zh-TW
• Published: 2010
• Online Access: http://ndltd.ncl.edu.tw/handle/51504270352560025902

碩士 === 輔仁大學 === 會計學系碩士班 === 98 === Auditor independence and audit quality issues have raised the participants in securities markets and regulators great concern around the world in the last decade, especially after the Enron case in the United States. Some academic researches show that auditor independence is more likely to be compromised as the length of audit partner or audit firm tenure increases, cause the audit partner-client relationship closer, or audit market pressure. But findings from prior studies did not suggest that earning equality deteriorates with extended audit firm tenure, and decrease in auditor objectivity and independence as the length of audit partner tenure increase. In this paper, we investigate the relation between auditor tenure and earnings quality using a sample of Taiwanese non-listed public companies. A performance-matched modified Jones model was used to estimate the proxy of earning quality-the absolute value of discretionary accruals (ADA). The empirically results show that the relation between auditor partner tenure / audit firm tenure and ADA are mixed. However, additional tests show that short-term audit partner tenure (shorter than five years) are positive related to the absolute value of discretionary accruals.