Mandatory audit firm rotation: a student perspective.
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Date
2019
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Abstract
The purpose of the research project was to obtain an understanding of student’s
perception of Mandatory Audit Firm Rotation (MAFR). The perception is determined
based on the impact students consider MAFR to have on auditor independence, audit
quality and other aspects of the auditing profession and practice are considered. A
theoretical framework for the auditing profession and practice as well as MAFR is
outlined, considering the role conflict theory, the audit expectation gap, economic
theories of regulation and the living law of auditing. Literature currently available on
audit firm rotation shows a mixture of both a positive and negative impact resulting
from the implementation of MAFR on independence, quality and other aspects. The
study follows a post-positivist research paradigm which informs the quantitative
approach in addressing the objectives of the project. The population for the study is
defined as auditing students at the universities of Zululand and KwaZulu-Natal
(determined to be 1 619). Those in attendance at a pre-determined auditing lecture
time slot or session were handed out the questionnaire for completion. A total of 413
questionnaires were collected, coded and captured for analysis. The data was then
analysed using descriptive and inferential statistics to determine the perception of
students on MAFR. Other comments on MAFR, solicited from participants were
summarised as part of the data analysis. The study concludes that the majority of
students believe that the implementation of MAFR would primarily yield positive
outcomes on independence, quality and other aspects and are thus can be considered
to be in favour of the implementation of MAFR.
Key words
Mandatory Audit Firm Rotation, MAFR, independence, audit quality, auditor rotation.
Description
Masters Degree. University of KwaZulu-Natal, Durban.