Published Paper Details:

The rotation of auditors influences managerial misconduct by affecting the financial performance and corporate governance of the company. The research explores the oversight of management and the board of directors in regulating auditor rotations, aiming to identify factors that lead to these rotations and assess their resulting effects. The size of the board of directors and management has a varying impact on the size of auditing firms, which are crucial for instilling confidence in shareholders and investors regarding corporate financial reporting. Additionally, doctrinal research underscores how investors and shareholders respond to frequent auditor switches, proposing different internal and external control mechanisms for ensuring independent checks and balances. Despite auditors not directly influencing a company's performance as part of its management team, there is an important recognition here regarding their significant role in understanding the link between financial performance and corporate governance. In conclusion, examining auditor switching uncovers insights into various stakeholders' involvement within a company while demonstrating its impact on both financial performance as well as corporate governance.