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Title
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The auditor selection process : institutional and interpersonal dynamics
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Author
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Abstract
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| Every audit engagement once started with an audit client selecting an auditor. Despite the auditor selection process being a crucial mechanism for ensuring auditor independence and enhancing audit quality, an understanding of how companies select an auditor was lacking before this dissertation. This dissertation investigates the auditor selection process employing a multi-methodological approach. The study synthesizes existing literature, analyzes archival data to explore audit partner-client alignment, and conducts qualitative research on eight large Dutch companies' auditor selection processes. This study reveals the importance of audit partner-client alignment when studying audit quality, auditor tenure, and auditor changes. Moreover, the findings indicate that despite regulatory efforts to standardize the selection process and enhance transparency, audit clients continue to prioritize relational factors over formal criteria. Additionally, the intended reduction of managerial influence on the selection process appears to be unsuccessful, as management remains significantly involved in every step of the process. Finally, this study highlights the importance of trust, cooperation, and commitment in auditor-client relationships, demonstrating how audit clients demand these qualities and how auditors strive to meet these expectations throughout the selection process. It suggests that mandatory audit firm rotation may introduce relational costs and reduce client-specific knowledge. These insights underscore the need for a balanced approach to regulation that considers both independence and relational dynamics. The dissertation offers insights for regulators, audit clients, and auditors and identifies avenues for future research on auditor selection behaviors and their implications. |
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Language
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English
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Publication
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Antwerp
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University of Antwerp, Faculty of Business and Economics, Department of Accounting and Finance
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2024
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DOI
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10.63028/10067/2067620151162165141
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Volume/pages
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viii, 204 p.
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Note
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Hardies, Kris [Supervisor]
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Vandenhaute, Marie-Laure [Supervisor]
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Full text (open access)
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