What Drives Auditor Selection Post-SOX?

• In Event: Applied Research Papers: Research That Bridges with Practice

Abstract

This study provides a description of factors impacting auditor selection in the post-SOX environment. Using a two stage approach, we survey and interview public company audit committee members, finding that management continues to provide input into the decision process even as SOX regulations require audit committees to take responsibility for the auditor selection decision. Results suggest that, in addition to their own experiences, audit committee members utilize input from company management and colleagues to assess the proposing audit partner’s reputation for accessibility, timeliness and ability to liaise with the firm’s national technical office, as well as the proposing audit firm’s technical and industry expertise. Results of this study can help firms be more competitive in the audit bidding process, inform policy makers when considering whether to impose further audit committee regulations, and aid academics in ensuring an up-to-date understanding of the audit committee’s role in the post-SOX auditor selection process.

Authors

• Kathleen Hertz Rupley, Portland State University

• Elizabeth D Almer, Portland State University

• Donna Philbrick, Portland State University