Sakai, Ayami (2025): EMPIRICAL STUDY ON THE DISCLOSURE OF REASONS FOR AUDITOR SWITCHING: EVIDENCE FROM JAPAN.
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Abstract
This study investigates the relationship between the context of auditor switching and the reasons for the switch provided in the extraordinary reports, which constitute one of the most distinctive characteristics of the auditor switching institution in Japan. The results of the empirical analysis indicate that the firms that switched from Big N to non-Big N auditors as well as the firms that received going-concern opinions just before auditor switching tended to provide “expiration of auditors’ term of office” as the reason for the switch in the extraordinary reports. Additionally, this study empirically examines whether the reasons provided in the extraordinary reports affect investment behavior. Using cumulative abnormal returns, this study demonstrates that there are no significant market reactions to the reasons for auditor switching. Thus, it can be concluded that the disclosure system related to the reasons for auditor switching may not be useful for investors.
Item Type: | MPRA Paper |
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Original Title: | EMPIRICAL STUDY ON THE DISCLOSURE OF REASONS FOR AUDITOR SWITCHING: EVIDENCE FROM JAPAN |
Language: | English |
Keywords: | Auditor Switching; Extraordinary Reports; Term of Office; Cumulative Abnormal Returns |
Subjects: | M - Business Administration and Business Economics ; Marketing ; Accounting ; Personnel Economics > M4 - Accounting and Auditing > M42 - Auditing |
Item ID: | 125060 |
Depositing User: | Dr Ayami Sakai |
Date Deposited: | 22 Jun 2025 06:10 |
Last Modified: | 22 Jun 2025 06:10 |
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URI: | https://mpra.ub.uni-muenchen.de/id/eprint/125060 |