Audit Partner Tenure and Internal Control Reporting Quality: U.S. Evidence from the Not‐For‐Profit Sector
研究了美国大型非营利组织中审计合伙人任期和变更对内部控制报告质量的影响，发现任期越长，内部控制报告质量越差，但变更与报告质量无显著关联。
Abstract This study examines the effects of audit partner tenure and audit partner changes on internal control reporting quality for large U.S. not‐for‐profit ( NFP ) organizations. Regulators contend that audit partners lose their objectivity over successive audits, reducing audit quality. A large body of research has examined this issue, primarily in non‐U.S. jurisdictions, with mixed results. We examine the associations between audit partner tenure and audit partner changes and the incidence of reported internal control deficiencies ( ICD s), the quality of internal control reports (following PCAOB audit quality indicators), and the severity of reported ICD s. We find negative associations between audit partner tenure and the incidence of reported ICD s, the quality of internal control reports, and the severity of reported ICD s. Together, these findings indicate that internal control reporting quality deteriorates with audit partner tenure. However, we find no association between audit partner changes and internal control reporting, which is consistent with partners lacking client specific knowledge in their first year with a client. Finally, we find no association between either audit partner tenure or changes and the likelihood of remediation. Our findings contribute large‐sample U.S. evidence on the association between audit partner tenure and internal control reporting quality and provide useful information to government regulators, NFP boards charged with the oversight of the external auditor and internal controls, and NFP stakeholders.