Journal of Finance and Accounting

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Mandatory Audit Firm Rotation and Audit Costs: A Survey of Auditing Firms in Bahrain

Received: 20 November 2014    Accepted: 28 November 2014    Published: 02 December 2014
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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.

DOI 10.11648/j.jfa.20140206.11
Published in Journal of Finance and Accounting (Volume 2, Issue 6, November 2014)
Page(s) 116-128
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2024. Published by Science Publishing Group

Keywords

Mandatory Audit Firm Rotation (MAR), European Commission (EC), Government Accounting Office (GAO), Audit Costs, Gulf Cooperation Countries (GCC), Company Accounting Oversight Board (PCAOB)

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Author Information
  • Department of Accounting, College of Business Administration, University of Bahrain, Kingdom of Bahrain

  • Department of Accounting, College of Business Administration, University of Bahrain, Kingdom of Bahrain

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  • APA Style

    Kousay M. Said, Hussein Ali Khasharmeh. (2014). Mandatory Audit Firm Rotation and Audit Costs: A Survey of Auditing Firms in Bahrain. Journal of Finance and Accounting, 2(6), 116-128. https://doi.org/10.11648/j.jfa.20140206.11

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    ACS Style

    Kousay M. Said; Hussein Ali Khasharmeh. Mandatory Audit Firm Rotation and Audit Costs: A Survey of Auditing Firms in Bahrain. J. Finance Account. 2014, 2(6), 116-128. doi: 10.11648/j.jfa.20140206.11

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    AMA Style

    Kousay M. Said, Hussein Ali Khasharmeh. Mandatory Audit Firm Rotation and Audit Costs: A Survey of Auditing Firms in Bahrain. J Finance Account. 2014;2(6):116-128. doi: 10.11648/j.jfa.20140206.11

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  • @article{10.11648/j.jfa.20140206.11,
      author = {Kousay M. Said and Hussein Ali Khasharmeh},
      title = {Mandatory Audit Firm Rotation and Audit Costs: A Survey of Auditing Firms in Bahrain},
      journal = {Journal of Finance and Accounting},
      volume = {2},
      number = {6},
      pages = {116-128},
      doi = {10.11648/j.jfa.20140206.11},
      url = {https://doi.org/10.11648/j.jfa.20140206.11},
      eprint = {https://download.sciencepg.com/pdf/10.11648.j.jfa.20140206.11},
      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.},
     year = {2014}
    }
    

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    AU  - Kousay M. Said
    AU  - Hussein Ali Khasharmeh
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    AB  - 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.
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