The purpose of this paper is to investigate the association between audit rotation – at the audit partner and audit firm level – and audit quality. As mentioned in the literature, audit rotation has several benefits, and one of them is it can bring a fresh look to audit tasks and subsequently improve audit quality. Moreover, audit itself can help a client to improve its financial reporting. However, ineffective communication between predecessor and successor audit partners or audit firms, and pseudo-rotation can hamper that benefit.,This study uses multivariate regression analysis to test its hypotheses. Using data from companies listed on the Indonesia Stock Exchange, the sample consists of 688 company-year observations covering the period 2003–2016.,This study finds that the cumulative number of audit partner rotations is positively associated with audit quality, indicating that rotations at the audit partner level will enhance audit quality. Conversely, it finds that the cumulative number of audit firm rotations is negatively associated with audit quality.,The study’s findings may assist regulators in crafting standards regarding audit rotation. As the findings show, audit partner rotation will improve audit quality, but the audit firm rotation will decrease audit quality. As this study tries to explain the decreasing audit quality from audit firm rotation could be a consequence of ineffective communication or pseudo audit firm rotation. Regulators should try to tackle these problems.,Instead of using tenure as a proxy for a rotation, this study creates a new proxy named the cumulative number of audit partner and audit firm rotations to provide evidence on the benefits of audit rotation.

中文翻译：

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审核员轮换和审核质量

本文的目的是调查在审计合作伙伴和审计事务所级别的审计轮换与审计质量之间的关系。如文献所述，审计轮换有几个好处，其中之一就是可以使审计任务焕然一新，从而提高审计质量。此外，审计本身可以帮助客户改善其财务报告。但是，前任和继任审计合伙人或审计事务所之间的沟通不畅以及伪轮换可能会妨碍这种收益。本研究使用多元回归分析来检验其假设。利用来自印度尼西亚证券交易所上市公司的数据，该样本包括688家公司对2003-2016年期间的观察。该研究发现，审计合伙人轮换的累积数量与审计质量呈正相关，表明审计合伙人级别的轮换将提高审计质量。相反，它发现审计公司轮换的累积数量与审计质量负相关。该研究结果可能有助于监管机构制定有关审计轮换的标准。结果表明，审计合伙人轮换将提高审计质量，但是审计公司轮换将降低审计质量。由于本研究试图解释由于审计事务所轮换而导致的审计质量下降，这可能是无效沟通或伪审计事务所轮换的结果。监管机构应设法解决这些问题。与其使用权属来代替轮换，