The number of years a public accounting firm can audit a company’s financial statements is limited by mandatory audit firm rotation. An accounting firm is no longer eligible to act as the company’s auditor for a specific time interval after a predetermined period, and a rotation of companies is required. The study’s goals are to: (1) investigate audit firms’ current audit appointment practises in Bahrain; (2) investigate audit firms’ opinions on the potential effects of implementing mandatory audit firm rotation (audit quality); and (3) investigate audit firms’ views on implementing mandatory audit firm rotation in Bahrain. To achieve these goals, a questionnaire was created and distributed to respondents, which included all auditors working in Bahraini audit firms. According to the data, there is a considerable link between obligatory audit firm rotation and audit quality. Longer partner tenure, according to the study, causes the auditor’s performance to suffer in the auditing process. The average mean of all hypothesis questions is 2.73, with a standard deviation of 0.94, which is less than half of the mean. This suggests that there is no disagreement among respondents concerning the hypothesis’s questions. The t-value obtained is 29.922, which is larger than the table critical value of t (1.66), and the p-value obtained is 0.000, which is less than the value of significance at p 0.05, according to the study. The null hypothesis is rejected, and the alternative hypothesis is accepted, because these results statistically demonstrate that there is a substantial association. Further research may be aimed at examining the influence of MAR on auditor independence and the cost of audit rotation, as this study focused on the impact of MAR on audit quality in Bahrain. However, characteristics not included in the study’s questionnaire may have an impact on the MAR.
Author (S) Details
Hussein Khasharmeh
University of Bahrain, Zallaq, Kingdom of Bahrain.
Kousay Said
University of Bahrain, Zallaq, Kingdom of Bahrain.
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