The Impact of Managing Director Changes and Financial Distress on Audit Qualification and Auditor Switching
This study examines the interactive effects of change in managing director/chief executive officer (MD) and financial distress together with five control variables (type of audit firm; audit fees; gearing; time; and company size) on first, audit opinion and secondly on auditor switching. Based on a sample of 297 UK listed companies between 1987 and 2001, we find that companies that are financially distressed and change their MD are most likely to receive a qualified audit report, "ceteris paribus". In addition, we find evidence of both familiarity and intimidation threats and that the probability of a switch increases with the severity of qualification. Copyright Blackwell Publishers Ltd, 2005.
Year of publication: |
2005-11
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Authors: | Hudaib, Mohammad ; Cooke, T.E. |
Published in: |
Journal of Business Finance & Accounting. - Wiley Blackwell, ISSN 0306-686X. - Vol. 32.2005-11, 9-10, p. 1703-1739
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Publisher: |
Wiley Blackwell |
Saved in:
freely available
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