Do Longer Auditor-Client Relationships Lead to Limited Issues? The Impact of Auditor Tenure on Financial Restatements
Open Access
Author:
Nybro, Natasha
Area of Honors:
Accounting
Degree:
Bachelor of Science
Document Type:
Thesis
Thesis Supervisors:
Samuel Burton Bonsall, IV, Thesis Supervisor Samuel Burton Bonsall, IV, Thesis Honors Advisor Brent Schmidt, Faculty Reader
Keywords:
Accounting Auditing
Abstract:
This thesis examines the relationship between auditor tenure and the likelihood of financial restatements. Using a sample of U.S company-year observations from the 2011-2020 period, this study aims to provide evidence about whether longer auditor-client relationships are associated with fewer instances of restated financial reports. The results of the study provide evidence that companies with longer auditor tenures are less likely to issue financial restatements, consistent with a positive effect of long auditor tenure on audit quality. In addition, the study highlights the importance of maintaining professional standards throughout auditor-client relationships to preserve financial integrity.
