• Auditor Tenure and Audit Quality

Abstract

This paper studies the relation between the likelihood of a going-concern opinion and auditor tenure. Auditor tenure is defined as both the CPA tenure and CPA-firm tenure. After controlling for the effect of client size, financial condition, prior period opinion, auditor type, the ability for the company to dispose assets to obtain cash and the new issue of stock or bond next year, empirical results indicate that the likelihood of a going-concern opinion is non-significantly or significantly positively related to auditor tenure. Therefore, the results do not support the argument that long auditor tenure has adverse effects on audit quality.

Keywords: Auditor tenure, Audit quality, Audit report, Going-concern opinion, Auditor independence