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Does Order of Audit Partners Matter? Audit Quality under Dual Attestation System
Rong - Ruey Duh,
National Taiwan University
Der - Fen Huang, National Dong Hwa University
Chi - Ping Hou, Tzu Chi College Of Technology
ABSTRACT. While many countries adopt measures to enhance corporate governance, uniformity of audit quality around the world cannot be assumed due to different institutions across countries. This paper examines the dual attestation system in Taiwan, which requires that financial statements of listed companies be audited by “jointly operated” CPA firms. Two audit partners should have their names signed on the audit report, and are held equal legal liability regardless of the signature order. We identified 149 audit partners who audited financial statements for listed companies for the period 1990-2004, and estimated audit quality for each audit partner. Regression analysis for each audit partner indicates that approximately 80 percent of the 149 audit partners whose audit quality is consistent across all engagements regardless of the signature order. The consisetnecy is not associated with whether they are from Big-4 or not.
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