Mandatory Audit Firm Rotation and Audit Costs: A Survey of Auditing Firms in Bahrain
Journal of Finance and Accounting
Volume 2, Issue 6, November 2014, Pages: 116-128
Received: Nov. 20, 2014; Accepted: Nov. 28, 2014; Published: Dec. 2, 2014
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Authors
Kousay M. Said, Department of Accounting, College of Business Administration, University of Bahrain, Kingdom of Bahrain
Hussein Ali Khasharmeh, Department of Accounting, College of Business Administration, University of Bahrain, Kingdom of Bahrain
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Abstract
The Purpose of this paper is to ascertain the perceptions of audit firms on the vexed issue of mandatory rotation of auditors in kingdom of Bahrain. A hand administered questionnaire survey of 102auditors, and accounting professionals was undertaken. Descriptive statistics were used to find out the most common reasons why respondents were agreed or disagreed with the idea of introduction of mandatory rotation of auditors in Bahrain and its effects on audit costs. The findings of the study indicate that there is an association between mandatory rotation of audit firms and audit costs. Analyses of variance (ANOVA) were also conducted to test the possibility of confounding effects arising from participants’ background and experience. None of these variables were found to have a confounding effect on the experimental results. The results also reveal that the adoption of rotation rules wasn’t given enough attention among the auditing firms in Bahrain. Finally, this study contributes to global debate on mandatory rotation of auditors from the view point of an emerging economy.
Keywords
Mandatory Audit Firm Rotation (MAR), European Commission (EC), Government Accounting Office (GAO), Audit Costs, Gulf Cooperation Countries (GCC), Company Accounting Oversight Board (PCAOB)
To cite this article
Kousay M. Said, Hussein Ali Khasharmeh, Mandatory Audit Firm Rotation and Audit Costs: A Survey of Auditing Firms in Bahrain, Journal of Finance and Accounting. Vol. 2, No. 6, 2014, pp. 116-128. doi: 10.11648/j.jfa.20140206.11
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