2011 Fiscal Year Final Research Report
The Effect of Mandatory Audit Firm Rotation : Experimental Investigations
| Project/Area Number |
21530480
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
Accounting
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| Research Institution | Meiji University |
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Principal Investigator |
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| Project Period (FY) |
2009 – 2011
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| Keywords | 監査法人 / 監査人の独立性 / 競争 / ゲーム理論 / 実験経済学 |
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| Research Abstract |
The aim of our research is to examine the effect of mandatory retention and rotation requirements on auditor independence and audit markets. Experimental investigations are conducted by using student-subjects in order to be as less biased as possible. In the first experiment introducing both mandatory retention and rotation requirements simultaneously is necessary so as to enhance auditor independence. In the last 2 experiments, where the investigations are conducted in more proper manner, however, adopting either retention or rotation requirement or both simultaneously doesn't have much impact on auditor independence. In addition a rotation requirement can make auditor change much more frequent and leads to a creation of more active audit markets. Furthermore a simple rotation requirement can decrease auditor independence in the periods where rotation is not mandatory and may cause ineffectiveness.
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