Poor audit quality has historically led to huge consequences for the society. A low audit quality is often related to a low auditor independence, which can be caused by the auditor's incentive to maximize personal gain. In attempts to strengthen the auditor independence and thereby the audit quality, several audit regulations have been issued, where the mandatory audit rotation has been the subject to intensive debate. Although the previous research on audit rotation and audit quality is extensive, few studies investigate the contingency aspects of the relationship more specifically firm visibility. The purpose of the study is to explain how audit firm rotation and audit partner rotation relate to audit quality and how this relationship is contingent on firm visibility. The study is conducted quantitatively using a positivistic deductive approach. Hypotheses are developed from existing theories and literature in the area. These are later tested by translating concepts into measurable variables. Audit quality has been measured through the proxy variable discretionary accruals which was estimated by two variants of the modified Jones model. The sample consisted out of 58 large-cap firms listed on the Stockholm OMX stock exchange, constituting a total of 580 firm years. The results of this study suggest that neither audit partner rotation nor audit firm rotation has an influence on audit quality. Furthermore, these relationships are not found to be contingent on firm visibility. The study’s findings contribute to existing debate on mandatory audit rotation. However, the results need to be interpreted with certain caution as we cannot be certain that discretionary accruals measured audit quality as it was intended to do.

Regleringen gällande revisorsrotationen syftar till att stärka revisorers oberoende men tidigare forskning har dock påvisat diverse påföljder som kan anses som både negativa och positiva för revisorernas arbete. Således förekommer det många oeniga resultat angående revisorsrotationens olika effekter i den tidigare forskningen.   Syftet med denna studie är att förklara revisorsrotationens effekter utifrån ställningstagandet hos revisorer i olika byråtillhörigheter och professionella karriärer. För att uppnå syftet har litteratur som behandlar revisorsrotationen, byråtillhörighet och revisorsprofessionen använts. Utifrån den tidigare forskningen har   studien   utformat   åtta    hypoteser   som behandlar    revisorsrotationens   ekonomiska   effekter, förtroendeeffekter och kvalitetseffekter. För att testa hypoteserna användes en webbaserad enkätundersökning riktad till revisorer som arbetar på små och stora revisionsbyråer i Sverige.     Denna studie påvisar att revisorer med längre erfarenhet inom revisionsbranschen har en mer negativ syn på rotationens förtroendeeffekter. Studien bekräftar även att revisorerna anser att regleringen överlag är nödvändig för revisionsbranschen vilket även stöds av den tidigare forskningen. Däremot kunde studien inte påvisa någon skillnad i ställningstagandet hos revisorer i olika byråtillhörigheter. Likaså kunde ingen skillnad påvisas mellan revisorer med olika långa professionella karriärer och rotationens ekonomiska effekter och kvalitetseffekter.   Studiens viktigaste bidrag är uppmärksammandet av revisorsrotationens effekter för revisionsbyråer och deras klientföretag. På så sätt blir revisionsbyråerna mer medvetna om rotationens påföljder vilket innebär att de eventuellt kan införa åtgärder för att hantera dessa. Studien kan även visa sig relevant för klientföretagen då studien bidrar med ökade kunskaper om hur regleringen påverkar revideringen av deras räkenskaper. / Mandatory audit rotation aims to improve auditor’s independence however previous research has shown that the regulation can cause both advantages and disadvantages on the audit profession. Researchers are therefore in a disagreement over whether or not the effects caused by the regulation are considered to be favourable or damaging to auditors.   The purpose of this study is to explain mandatory audit rotation based on audit firm affiliation and auditors’ professional careers. A considerable amount of previous literature and research papers have been examined in order to reach the purpose of this study. Eight hypotheses have been defined based on earlier research within the subject. The hypotheses deal with the three main effects caused by the regulation, namely effects related to economics, public assurance and quality. A survey was used to test the study’s hypotheses and the selected respondents were auditors in Sweden.     The results of the study show that more experienced auditors have a more negative view on the regulations effects related to public assurance. The study also confirms that auditors general view is that the regulation is necessary and important. On the other hand, the study could not prove that auditors within different firm affiliations have different views on the regulation.   This study contributes to an increased understanding of how mandatory audit rotation effects auditors and their clients. By increasing the audit professions understanding and knowledge about the regulation audit firms can focus on taking action to handle the effects in a more efficient way.

Submitted by Silvana Teresinha Dornelles Studzinski (sstudzinski) on 2017-02-10T12:19:50Z No. of bitstreams: 1 Adalene Olivia Silvestre_.pdf: 590609 bytes, checksum: 188661a0ac02964a45900cec5e4c0062 (MD5) / Made available in DSpace on 2017-02-10T12:19:50Z (GMT). No. of bitstreams: 1 Adalene Olivia Silvestre_.pdf: 590609 bytes, checksum: 188661a0ac02964a45900cec5e4c0062 (MD5) Previous issue date: 2016-12-20 / CAPES - Coordenação de Aperfeiçoamento de Pessoal de Nível Superior / PROSUP - Programa de Suporte à Pós-Gradução de Instituições de Ensino Particulares / A auditoria independente exerce um importante papel na relação entre a empresa e os usuários externos à entidade, devendo o auditor ser independente em relação à empresa auditada. No Brasil, o rodízio obrigatório de firma de auditoria é regulamentado pela Instrução CVM 308/99 na tentativa de contribuir com a manutenção da independência do auditor e, consequentemente, com a qualidade dos lucros divulgados pelas empresas. Diante disto, o presente estudo tem por objetivo analisar o efeito do rodízio da firma de auditoria sobre a qualidade dos lucros das empresas de capital aberto brasileiras listadas na BM&FBOVESPA no período de 2008 a 2015. Como medida de qualidade dos lucros foram utilizados os accruals residuais, que identificam a parcela discricionária dos accruals, medida inversa à qualidade dos lucros. Os accruals residuais foram abordados a partir de duas diferentes perspectivas: o gerenciamento de resultados, medido pelos modelos de Jones (1991) e Jones Modificado por Dechow, Sloan e Sweeney (1995) e os erros de estimativas, medidos pelos modelos de Dechow e Dichev (2002) e Dechow e Dichev modificado por McNichols (2002). Os resultados demonstram que o rodízio de firma de auditoria reduz o volume de accruals residuais e, assim, aumenta a qualidade dos lucros, quando esses são mensurados a partir da perspectiva do gerenciamento de resultados, através dos modelos de Jones e Jones modificado. Entretanto, o efeito do rodízio de firma de auditoria sobre a qualidade dos lucros não é observado quando os accruals residuais são mensurados a partir da perspectiva dos erros de estimativas contábeis, através dos modelos de Dechow e Dichev e McNichols. Por outro lado, os resultados demonstram que as empresas que realizam rodízio voluntário de firma de auditoria apresentam maiores accruals residuais e, consequentemente, menor qualidade dos lucros. / Independent audit plays an important role in the relationship between the company and external users, and the auditor must be independent of the audited company. In Brazil, the mandatory audit firm rotation is regulated by CVM Instruction 308/99, in an attempt to contribute to the maintenance of auditor independence and, consequently, with the quality of earnings disclosed by the companies. Therefore, the present study has the objective of analyzing the effect of the audit firm rotation on the earnings quality of Brazilian public companies listed on BM&FBOVESPA in the period from 2008 to 2015. Residuals accruals were used as a measure of earnings quality, which identify a discretionary portion of the accruals, inverse measure of earnings quality. The residuals accruals were approached from two different perspectives: earnings management, measured by Jones model (1991) and Jones modified by Dechow, Sloan and Sweeney model (1995) and the estimation errors, measured by the Dechow and Dichev model (2002) and Dechow and Dichev modified by McNichols model (2002). The results show that audit firm rotation reduced the volume of residuals accruals and, thus, increases the earnings quality, when these are measured from the perspective of earnings management through the Jones and Jones modified models. However, the effect of audit firm rotation on the earnings quality is not observed when the residuals accruals are measured from the perspective of accounting estimation errors, through the Dechow and Dichev and McNichols models. On the other hand, the results demonstrate that the companies that perform the voluntary audit firm rotation have greater residuals accruals and, consequently, lower earnings quality.