In India, the government introduced mandatory audit firm rotation following calls to improve audit quality and auditor independence in the wake of the Satyam accounting scandal. The absence of strong institutional mechanisms to prevent and detect audit failure in a timely manner has led the...

Safeguarding reputation is one major incentive for large auditors to maintain high audit quality. We investigate the phenomenon of reputation by studying the impact of an audit failure on the reputation of a large audit firm in India. Specifically, we analyze the events surrounding the high...