U.S. Audit Partner Rotations

60 Pages Posted: 28 Oct 2014 Last revised: 29 Jan 2019

See all articles by Henry Laurion

Henry Laurion

University of Colorado at Boulder - Department of Accounting

Alastair Lawrence

London Business School

James Ryans

London Business School

Date Written: June 15, 2016


We investigate the effects of audit partner rotation among U.S. publicly listed firms, utilizing the fact that audit partners are periodically copied by name in public correspondence between issuers and the SEC. Relative to non-rotation firms, we find no evidence of a change in the frequency of misstatements following the partner rotation; however, there is an increase in the frequency of restatement discoveries and announcements. We also find an increase in deferred tax valuation allowances. Overall, the results provide some evidence suggesting that U.S. partner rotations support a fresh look at the audit engagement.

Keywords: U.S. audit partner rotations; fresh look; restatements; valuation allowances and reserves; write-downs; special items.

JEL Classification: M41, M42, M48

Suggested Citation

Laurion, Henry and Lawrence, Alastair and Ryans, James, U.S. Audit Partner Rotations (June 15, 2016). Accounting Review, Vol. 92. No. 3, 2017, Available at SSRN: https://ssrn.com/abstract=2515586 or http://dx.doi.org/10.2139/ssrn.2515586

Henry Laurion

University of Colorado at Boulder - Department of Accounting ( email )

419 UCB
Boulder, CO 80309-0419
United States

Alastair Lawrence (Contact Author)

London Business School ( email )

Regent's Park
United Kingdom

HOME PAGE: http://Www.alastairlawrence.net

James Ryans

London Business School ( email )

Sussex Place
Regent's Park
London, NW1 4SA
United Kingdom

HOME PAGE: http://www.london.edu

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Abstract Views
PlumX Metrics