What Drives Auditor Selection?

SUMMARY This study provides evidence on the factors that currently impact audit committee members' selection of external auditors. Using a two-stage approach, we survey and interview public company audit committee members (ACMs), and find evidence that management continues to provide input into...

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Bibliographic Details
Published in:	Current issues in auditing 2014-06, Vol.8 (1), p.A26-A42
Main Authors:	Almer, Elizabeth Dreike, Philbrick, Donna R., Rupley, Kathleen Hertz
Format:	Article
Language:	eng
Subjects:	Accounting firms Audit committees Auditors Decision making Public Company Accounting Reform & Investor Protection Act 2002-US Studies
Online Access:	Get full text
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Summary:	SUMMARY This study provides evidence on the factors that currently impact audit committee members' selection of external auditors. Using a two-stage approach, we survey and interview public company audit committee members (ACMs), and find evidence that management continues to provide input into the decision process even as SOX regulations require audit committees to take responsibility for the auditor selection decision. ACMs view management as an important information source when they assess the proposing audit partner's reputation for accessibility, timeliness, and ability to liaise with the firm's national technical office, as well as the proposing audit firm's technical and industry expertise. Results of this study can help firms be more competitive in the audit bidding process, inform policy makers when considering whether to impose further audit committee regulations, and aid academics in ensuring an up-to-date understanding of the audit committee's role in the auditor selection process.
ISSN:	1936-1270 1936-1270