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Title: An assessment of mandatory audit firm rotation and limitation of non-audit services imposed by the Regulation (EU) No 537/2014: Evidence from Spain
Author: García Blandón, Josep
Argilés Bosch, Josep M.
Martínez Blasco, Mònica
Castillo Merino, David
Keywords: Auditoria
Empreses auditores
Accounting firms
Issue Date: Sep-2017
Publisher: Elsevier
Abstract: On May 27, 2014, Regulation (EU) No 537/2014 was published in the Official Journal of the European Union. Aiming to enhance audit quality, the new regulation establishes important limitations to the selling of non-audit services by the audit firm to audit clients and a maximum tenure of ten years with the audit firm. However, it should be noted that the extant research has not consistently supported that non-audit services or long tenures impair the quality of audits. This research studies whether these provisions have been empirically associated with reduced audit quality for Spain. Because of its low litigation risk, the potentially negative impact of both non-audit services and tenure on audit quality should be clearly observed in the Spanish audit market. Nevertheless, we do not find significantly lower levels of audit quality associated with either non-audit services or long audit tenures. However, these results are conditional on the validity of using abnormal accruals to measure audit quality.
Note: Versió postprint del document publicat a:
It is part of: International Journal of Accounting, 2017, vol. 52, num. 3, p. 251-261
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ISSN: 0020-7063
Appears in Collections:Articles publicats en revistes (Empresa)

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