EMPIRICAL INVESTIGATION OF THE EFFECT OF MANDATORY AUDITOR ROTATION AND FIRM SIZE ON AUDIT QUALITY IN GHANA

https://doi.org/10.5281/zenodo.10853383

Authors

  • Solberg, Horve Mishiwo University of Cape Coast

Keywords:

MAR, Firm size, Audit quality, Hausman test, Random-effects Logistic regression model

Abstract

Previous studies have verified that mandatory rotation of auditors enhances auditors’ independence and results in elevated audit criteria. The aim of this study is to analyze the influence of required auditor rotation (MAR) and firm size on the quality of audits while considering the factors of auditor experience and auditor independence, which have been overlooked in prior research. This research will substantially impact the existing body of knowledge. The study collected secondary data from 20 publicly traded companies on the Ghana stock exchange market, spanning 2014 to 2023. The Hausman test was applied to determine the random-effects logistic regression model. The results indicated that MAR, firm size, and auditor independence have a positive and significant impact on the audit quality of a firm. This suggests that higher MAR, larger firm size, and greater auditor independence are more likely to improve audit quality. Therefore, it is crucial for Ghanaian firms and other firms in Western African communities, as well as emerging economies worldwide, to implement mandatory auditor rotation to enhance auditor independence and audit quality. This, in turn, will positively impact the firm’s overall performance during the fiscal year

Published

2024-03-22

How to Cite

Horve Mishiwo, S. (2024). EMPIRICAL INVESTIGATION OF THE EFFECT OF MANDATORY AUDITOR ROTATION AND FIRM SIZE ON AUDIT QUALITY IN GHANA. Journal of Interdisciplinary Research in Accounting and Finance (JIRAF), 11(1), 74–85. https://doi.org/10.5281/zenodo.10853383

Issue

Vol. 11 No. 1 (2024): January-March

Section

Original Peer Reviewed Articles
Copyright & Licensing

Copyright (c) 2024 Journal of Interdisciplinary Research in Accounting and Finance (JIRAF)

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

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