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Institutional Ownership In Relation To The Mandatory Audit Firm Rotation Rule And Its Effect On Audit Quality, Latisha Shah
Institutional Ownership In Relation To The Mandatory Audit Firm Rotation Rule And Its Effect On Audit Quality, Latisha Shah
CMC Senior Theses
Previous studies have concluded that mandatory audit firm rotation (MAFR) has not been successful in controlling the outcomes of the auditor-client relationship. Additionally, the literature concludes that high institutional ownership enhances audit quality through monitoring the management-auditor relationship. This paper hypothesizes that better corporate governance in terms of high institutional ownership percentage will enhance audit quality during a MAFR regime. Since countries that have implemented MAFR in the past have their data in their local languages, I use the special case of Arthur Andersen clients based in the US as my treatment group. I carry out a descriptive statistical analysis …