Auditors and Corporate Governance: Evidence from the Public Sector

26 Pages Posted: 13 Apr 2013

See all articles by Mark Schelker

Mark Schelker

University of Fribourg; CREMA; CESifo (Center for Economic Studies and Ifo Institute); SIAW, University of St. Gallen

Multiple version iconThere are 2 versions of this paper

Date Written: May 2013

Abstract

Corporate auditors review and evaluate financial statements. Audit quality depends on auditor expertise and independence. To enhance auditor independence the selection process and auditor rotation requirements have been debated intensively. The available empirical evidence is not conclusive and suffers from serious endogeneity problems. I propose learning from the public sector where auditors play a similar role and present empirical evidence on the impact of auditor expertise, term length and rotation requirements on government performance at the US state level. I find evidence indicating that greater auditor expertise and rotation requirements have a positive effect on state credit ratings.

Suggested Citation

Schelker, Mark, Auditors and Corporate Governance: Evidence from the Public Sector (May 2013). Kyklos, Vol. 66, Issue 2, pp. 275-300, 2013. Available at SSRN: https://ssrn.com/abstract=2250249 or http://dx.doi.org/10.1111/kykl.12021

Mark Schelker (Contact Author)

University of Fribourg ( email )

Fribourg
Switzerland

CREMA ( email )

Gellertstrasse 18
Basel
Zurich, CH 8006
Switzerland

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

SIAW, University of St. Gallen ( email )

Bodanstrasse 8
Saint Gallen, St. Gallen CH-9000
Switzerland

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