Auditor appointment in compulsory audit tendering

Description
The purpose of this paper is to examine what auditor and audit environmental attributes
affect auditor appointment decisions in compulsory audit tendering, and whether the attributes
affecting appointment of a new auditor (rotation) are consistent with or different from those affecting
reappointment of the incumbent (retention).

Accounting Research Journal
Auditor appointment in compulsory audit tendering
Kym Butcher Graeme Harrison J ill McKinnon Philip Ross
Article information:
To cite this document:
Kym Butcher Graeme Harrison J ill McKinnon Philip Ross, (2011),"Auditor appointment in compulsory audit
tendering", Accounting Research J ournal, Vol. 24 Iss 2 pp. 104 - 149
Permanent link to this document:http://dx.doi.org/10.1108/10309611111163682
Downloaded on: 24 January 2016, At: 21:13 (PT)
References: this document contains references to 62 other documents.
To copy this document: [email protected]
The fulltext of this document has been downloaded 2175 times since 2011*
Users who downloaded this article also downloaded:
Winifred D. Scott, Willie E. Gist, (2013),"Forced auditor change, industry specialization and audit fees",
Managerial Auditing J ournal, Vol. 28 Iss 8 pp. 708-734http://dx.doi.org/10.1108/MAJ -11-2012-0779
Diana Mostafa Mohamed, Magda Hussien Habib, (2013),"Auditor independence, audit quality and the
mandatory auditor rotation in Egypt", Education, Business and Society: Contemporary Middle Eastern
Issues, Vol. 6 Iss 2 pp. 116-144http://dx.doi.org/10.1108/EBS-07-2012-0035
Rani Hoitash, Ariel Markelevich, Charles A. Barragato, (2007),"Auditor fees and audit quality", Managerial
Auditing J ournal, Vol. 22 Iss 8 pp. 761-786http://dx.doi.org/10.1108/02686900710819634
Access to this document was granted through an Emerald subscription provided by emerald-srm:115632 []
For Authors
If you would like to write for this, or any other Emerald publication, then please use our Emerald for
Authors service information about how to choose which publication to write for and submission guidelines
are available for all. Please visit www.emeraldinsight.com/authors for more information.
About Emerald www.emeraldinsight.com
Emerald is a global publisher linking research and practice to the benefit of society. The company
manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as
providing an extensive range of online products and additional customer resources and services.
Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee
on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive
preservation.
*Related content and download information correct at time of download.
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
Auditor appointment in
compulsory audit tendering
Kym Butcher
School of Accounting, University of Western Sydney, Sydney, Australia
Graeme Harrison and Jill McKinnon
Department of Accounting and Finance, Macquarie University, Sydney,
Australia, and
Philip Ross
School of Accounting, University of Western Sydney, Sydney, Australia
Abstract
Purpose – The purpose of this paper is to examine what auditor and audit environmental attributes
affect auditor appointment decisions in compulsory audit tendering, and whether the attributes
affecting appointment of a new auditor (rotation) are consistent with or different from those affecting
reappointment of the incumbent (retention).
Design/methodology/approach – New South Wales (NSW) local council ?nance managers were
surveyed for importance ratings of 48 attributes. An hypothesis for differential ratings between
rotators and retainers was formulated. Con?rmatory factor analysis, tests of mean differences and
logistic regression were used.
Findings – Consistent with the sample’s high retention rate, the most important attributes for all
respondents related to the quality of previous experience with the incumbent. Consistent with
hypothesis, attributes proxying for a quality auditor (technical competence, independence and
reputation) were more important for rotators.
Research limitations/implications – The authors proxied rotation/retention by intention. Given
the importance of audit quality attributes in the appointment decision and the high retention rate in
compulsory audit tendering, future research could examine the relation between audit service quality
attributes and retention.
Originality/value – This is the ?rst study to examine attributes affecting auditor appointment
decisions in a mandatory choice setting. NSWlocal councils provide a unique opportunity to do so as it
is one of few jurisdictions in which compulsory audit tendering operates. Compulsory tendering may
be implemented if current legislation aimed at improving audit independence and quality through
mandatory partner rotation proves infeasible.
Keywords Australia, Compulsory audit tendering, Auditor appointment, Auditor choice,
Auditor rotation, Auditor retention, Local government audit, Auditors
Paper type Research paper
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1030-9616.htm
Associate Professor Jill McKinnon died in June 2008. Her co-authors acknowledge her invaluable
contribution to this paper and the research leading thereto. The authors also acknowledge the
helpful comments of Neil Fargher, Russell Craig, Renee Radich, Ken Trotman, Lawrence Abbott,
David Hay, Alicia Jiang and two anonymous reviewers. The authors are grateful for the support
of this research by the NSW Division of Local Government, Department of Premier and Cabinet,
the Local Government Managers Australia NSW, Local Government Finance Professionals, the
Local Government Internal Audit Network NSW and the Chief Financial Of?cers/Finance
Managers of NSW local councils.
ARJ
24,2
104
Accounting Research Journal
Vol. 24 No. 2, 2011
pp. 104-149
qEmerald Group Publishing Limited
1030-9616
DOI 10.1108/10309611111163682
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
1. Introduction
Compulsory audit tendering was introduced to local government in the Australian
state of New South Wales (NSW) through The Local Government Act in 1993 (NSW
Government, 1993) as the means of external auditor procurement for local councils.
The Act mandates that NSW local councils call open tenders for audit services every
six years for the following (guaranteed) six-year tenure period, with the incumbent
auditor eligible to reapply.
Councils are not required to accept the lowest bid, and both price and service quality
factors are takeninto account (Boonet al., 2005). Tenderers submit a joint price andquality
plan and must trade-off between the chance of failing an unde?ned quality threshold and
the need to keep costs down to outbid other tenderers whose plans pass the unde?ned
quality test (Boon et al., 2005; Cripps and Ireland, 1994)[1]. If the incumbent reapplies,
councils choose between the incumbent and other audit ?rm tender applicants. If the
incumbent does not reapply, councils choose a new auditor from the tenderers.
The purpose of this study is twofold. First, we provide descriptive evidence on what
auditor and audit environmental attributes affect auditor appointment decisions in the
context of compulsory audit tendering. Second, we examine whether the attributes that
affect the appointment of a newauditor (a rotationdecision) are consistent with, or different
from, those that affect the reappointment of the incumbent auditor (a retention decision).
The ?rst motivation for the study is that few studies have examined auditor
appointment in a mandated context, with the majority of prior studies focusing on the
voluntary context (Sands and McPhail, 2003; Beattie and Fearnley, 1995; Deloitte,
Haskins and Sells, 1978). All the limited mandated auditor choice studies have taken
advantage of the collapse of former Big 5 ?rm Arthur Andersen to examine the
in?uence of (predominantly) demand-side attributes on the forced selection of a new
auditor by Andersen’s clients (Nagy, 2005; Blouin et al., 2007; Bewley et al., 2008;
De Martinis et al., 2009). However, while, demand-side characteristics are likely to be
in?uential in the type and size of audit ?rm selected (Beattie and Fearnley, 1998a;
Woo and Koh, 2001), Sands and Huang (2002) argue that supply-side characteristics
are the key in?uence in the auditor replacement decision. Hence, this study will
contribute to the auditor choice literature by examining the in?uence of supply-side
attributes on the auditor appointment decision in a mandated setting.
Compulsory audit tendering provides a unique opportunity to examine attributes
affecting auditor appointment in a mandated tendering context. Attributes in?uencing
appointment in a voluntary regime may not be generalizable to a compulsory regime
because an entity’s need to make a decision (a forced decision) is different from an
entity’s desire to make a decision (a voluntary decision) (Nagy, 2005).
Under a voluntary regime, appointment decisions are desired in that entities are
unlikely to incur the cost of tendering for audit services unless they are dissatis?ed
with their incumbent auditor, and are predisposed to changing auditors
(Lorentzen, 1992). That is, a decision is made voluntarily to terminate the incumbent
auditor, usually due to dissatisfaction or intent to change, and tenders for audit
services are called, with the incumbent having a lower likelihood of being retained
(Beattie and Fearnley, 1998a, b; Johnson, 1993).
Under a mandated (compulsory) regime, such as that for NSW local
councils, auditor appointment is a needed decision in that, as noted previously, it is
a legislative requirement that councils tender for audit services every six years.
Auditor
appointment
105
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
That is, the incumbent auditor is “mandatorily terminated” every six years and a
decision made to reappoint the incumbent (if the incumbent reapplies), or to appoint a
new auditor for the next six-year guaranteed tenure period. In a mandated regime,
councils may be predisposed to either retaining or changing their incumbent leading
up to the tender, based on the quality of their experience with the incumbent during the
preceding tenure period. Empirical evidence suggests that if the incumbent reapplies,
there is a high probability of retention (Boon et al., 2005).
Adifferent predispositionto changingauditors prior to tenderingsuggests that auditor
attributes are likely to be differentially important in the auditor selection decision under a
voluntary versus mandated tendering regime. This study will contribute to the auditor
choice literature by examining whether attributes relevant to auditor appointment in a
mandated (needed) context are consistent with, or different from, those considered
important in auditor appointment decisions in a voluntary (desired) context.
The second motivation is that while compulsory audit tendering has been proposed
as a way to improve auditor independence and audit quality, there is little empirical
evidence on the consequences of compulsory tendering. Understanding those
consequences is important because, following the independence concerns surrounding
the corporate collapses in the early 2000s (e.g. Enron and WorldComin the USAand HIH
and One.Tel in Australia), CPAAustralia called for the introduction of compulsory audit
tendering every ?ve years to the private sector audit market (Buf?ni, 2002).
Current legislation in Australia (the Corporate Law Economic Reform Program 9,
CLERP 9 (Commonwealth of Australia, 2004, 2006)) and the Sarbanes-Oxley Act, 2002
in the USA provide for compulsory audit partner rotation every ?ve years. However,
research has suggested that compulsory partner rotation might not prove feasible,
particularly in the Australian audit services market for small audit ?rms, ?rms in
non-major cities, and industry specialist ?rms, because of the limited number of audit
partners available to meet the legislative requirement (Ryken et al., 2007)[2], [3].
If mandatory partner rotation proves inadequate or infeasible, compulsory audit
tendering is an alternative, motivating the need for empirical research into the
consequences of compulsory audit tendering for auditor appointment decisions and its
likely effect on independence and audit quality[4].
The study contributes to the audit regulation literature generally by providing
evidence on potential consequences of compulsory audit tendering for auditor
appointment decisions. The study has speci?c implications for the regulators of, and
professional support bodies associated with, NSW local councils, such as the Local
Government Managers Australia NSW. This association is a non-regulatory body that
provides support to local council managers, and issued councils with a sample tender
speci?cation when compulsory audit tendering was introduced in 1993. The
speci?cation details nine categories of auditor attributes that councils should consider
in an auditor selection decision[5].
However, the extent to which the speci?cation is relevant and useful in local council
decisions is unknown. This is because, while the speci?cation details the attributes
councils should take into account, it is a guide only, and descriptions in audit tenders are
incomplete, imprecise and open to a variety of interpretations (Boon et al., 2005).
How councils interpret and weight these attributes is unknown as the speci?cation was
established in 1993 and has not been re-examined for its relevance to councils in practice.
Hence, the ?ndings of this study will inform regulators on revisions that may be needed
ARJ
24,2
106
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
to make the speci?cation more contemporarily relevant. Our ?ndings also have
implications for audit ?rms tendering to local councils. Tenderingis costly and our results
allow ?rms to direct tenders towards those attributes of most importance to councils[6].
We survey NSW local council ?nance managers for their perceived importance
ratings of 48 auditor and audit environmental attributes in auditor appointment
decisions. The attributes are based on the auditor appointment literature and on the
sample tender speci?cation provided to councils to guide appointment decisions.
The speci?cation itself is not suf?cient to supply the attributes for examination
because it is incomplete and may potentially not contain attributes considered
important by local councils.
We ?nd that the most important attributes across all respondents relate to the
quality of previous experience with the incumbent audit ?rm (speci?cally, the overall
quality of audit services provided by the audit ?rm, the quality of advice to council
management, and the ability of the audit partner(s) to meet deadlines). The importance
of these attributes is consistent with the composition of the sample which had a high
rate of retention of the incumbent auditor. Also important across the total sample are
audit ?rm reputation, independence, and experience in conducting local government
audits and audits generally.
With regard to differences in attributes that affect the appointment of a new auditor
versus reappointment of an incumbent, we ?nd that attributes proxying for a quality
auditor, speci?cally technical competence, independence and audit ?rm reputation,
are more important for rotators than retainers. This is consistent with our hypothesis.
2. Literature, theory and hypothesis development
2.1 Prior literature
The majority of prior auditor choice research focuses on auditor appointment in
a voluntary auditor procurement context. This literature examines the importance of
a wide variety of client (demand-side), auditor (supply-side) or audit environmental
(audit engagement) attributes on two decisions; a decision to reappoint the incumbent
auditor (a retention decision) or a decision to appoint a new auditor (a rotation decision)
(Hermanson et al., 1994)[7]. Attributes relevant to both decisions are interrelated
(Hermanson et al., 1994; Beattie and Fearnley, 1995) but the relative importance of
attributes is likely to vary across decisions (Beattie and Fearnley, 1995; Rummel et al.,
1999; Stanny et al., 2000; Sands and Huang, 2002: Sands and McPhail, 2003).
Auditor rotation is typically seen as involving both change and selection decisions
(Eichenseher and Shields, 1983; Francis and Wilson, 1988; Beattie and Fearnley, 1998b;
Sands and Huang, 2002; Sankaraguruswamy and Whisenant, 2004). That is, a decision
is made ?rst to change audit ?rm, and then subsequently a new ?rm is selected[8].
In the mandated setting of compulsory audit tendering, the change decision has
occurred during the six-year period leading to the tender. Hence, councils approach the
tender with a predisposition to change or retain their incumbent audit ?rms. We
therefore focus on the selection decision only, and speci?cally, on the appointment of a
new auditor or reappointment of the incumbent.
Studies that have examined attributes relevant to appointment of a new or
reappointment of an incumbent auditor have included a multitude of attributes, with the
major ?nding that technical competence is the most important in appointment decisions
(Addams and Allred, 2002; Beattie and Fearnley, 1995; Deloitte, Haskins and Sells, 1978).
Auditor
appointment
107
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
Several studies have focused on attributes differentially affecting appointment of a new
auditor compared to retention of the incumbent. The majority of these studies are
practitioner based (Stanny et al., 2000; Rummel et al., 1999; Gabhart and Miller, 1984)
with Sands and McPhail’s (2003) academic study being a notable exception.
In relation to the appointment of a new auditor, the practitioner-based studies ?nd
expertise to be the most important, whilst Sands and McPhail (2003) found that audit
fee and effective preparation and communication of the audit submission were more
important to rotators[9]. In relation to reappointment of the incumbent, no common
attributes emerge. Rather, the practitioner-based studies ?nd a range of attributes
relevant to experience with the incumbent to be important, including data processing
capabilities and the ability of the partner to communicate effectively (Gabhart and
Miller, 1984), staff personalities and meeting deadlines (Rummel et al., 1999), and
overall quality of services (Stanny et al., 2000).
2.2 Theory and hypothesis development
We develop an hypothesis for the second purpose of our paper which is to examine
whether there is a difference in the perceived importance of attributes affecting
appointment of a new auditor (a rotation decision) versus those affecting the
reappointment of the incumbent (a retention decision). We hypothesize that there will
be a difference in attributes affecting rotation and retention decisions because of
a difference inthe predispositionto change audit ?rmleadingupto the compulsorytender.
In a voluntary audit tendering context, clients are likely to be predisposed to
changing their audit ?rm (Lorentzen, 1992). By contrast in the mandated context
(of NSW local councils), councils will approach the appointment decision at the time of
compulsory tender with either a predisposition to change or retain their incumbent,
based on dissatisfaction or satisfaction with the quality of the audit services provided
by the incumbent developed during the six-year tenure period. The guaranteed tenure
period affects councils’ predisposition in that:
.
should a new auditor prove unsatisfactory, the council is “locked-in” for the
six-year period; and
.
the costs of training a new auditor are likely to be high given the complex nature
of council activities, duties and compliance requirements.
Councils will likely be predisposed to retaining their incumbent auditor if the
incumbent reapplies and the council is satis?ed with the quality of services provided
during their tenure (Rummel et al., 1999; Pandit, 1999; Stanny et al., 2000). Councils will
likely be predisposed to appointing a new auditor if the incumbent does not reapply,
or reapplies but the council is dissatis?ed with the quality of the audit services
provided (Burton and Roberts, 1967; Beding?eld and Loeb, 1974; Williams, 1988;
Beattie and Fearnley, 1995; Behn et al., 1997).
In this mandated context, we expect that the majority of councils will be
predisposed to retaining their incumbent. This is for two reasons. First, Boon et al.
(2008) found that NSW local councils are generally satis?ed with the quality of audit
services provided by their incumbent auditors. Second, Boon et al. (2005) provide
evidence of high retention rates in NSW local government, with 59 percent and
75 percent of councils retaining their auditors at the ?rst and second mandated tenders
in 1995 and 2001 (and 86 percent at the third tender in 2007). This contrasts with
ARJ
24,2
108
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
the low retention rates of 18 and 17 percent, respectively, found in Beattie and
Fearnley’s (1998a) and Johnson’s (1993) voluntary audit tendering studies.
Beattie and Fearnley (1995) found that the two most frequently stated reasons
for considering auditor change were the level of audit fee and dissatisfaction with the
quality of the incumbent. In a voluntary tendering context, fee considerations are likely to
be more important thanqualityconsiderations, withBeattie andFearnley(1998a, b) noting
the concern by regulators and academics that the tendering process would be used as a
fee-minimization strategy, hence compromising auditor independence and audit quality.
In the mandated context of NSW local government, however, quality considerations are
likely to be more important than the level of fees. This is because, as Boon et al. (2005)
show, audit fees for all local councils decreased by 40 percent at the time of introduction of
compulsory tendering in 1993, and have remained at that lower level. Hence, fees are not
expected to be important in auditor appointment decisions in our study.
We hypothesize that councils predisposed to change their auditor because of
dissatisfaction with the incumbent will likely rotate towards a quality auditor
(Boon et al., 2005). These councils have no direct experience with the quality of
prospective new auditors, and, hence, must use proxies for audit quality determinable
from the tender submissions or other publicly available sources. That is, they must rely
on attributes observable ex ante about the quality of prospective auditors.
In terms of observable proxies for audit quality ex ante, the de?nition of audit quality
is an initial reference point. DeAngelo (1981a) de?ned audit quality as comprising
competence (the probability that the auditor will discover a breach or misstatement) and
independence (the probability that the auditor will report the breach or misstatement).
Herrbach (2001) de?ned audit quality similarly as technical quality (competence) and
professional behaviour (independence). Moizer (1997, p. 63) argued that reputation
(image or brand-name) was also an important observable ex ante proxy for audit quality.
Consistent with DeAngelo (1981a), Herrbach (2001) and Moizer (1997), we contend
that the best observable ex ante proxies for audit quality are technical competence,
independence, and audit ?rm reputation. We hypothesize that councils predisposed to
rotate auditors at compulsory tender will rate these proxies for quality as more
important in their auditor appointment decisions compared to councils predisposed to
retain their incumbent.
Technical competence is important because a client, here a local council, “needs to have
considerable con?dence in the technical skill set of the partners, managers and staff
professionals in order to choose a ?rm” (Addams and Allred, 2002, p. 63). Technical
competence comprises technical quali?cations, audit experience generally and audit
expertise at both the audit ?rm and audit team (individual) level. Consistent with Ghosh
andMoon’s (2005) distinctionof audit experience andaudit expertise, experience is de?ned
as “expert knowledge” gainedthroughyears of on-the-jobexperience (Ashton, 1991), while
expertise relates to industry-speci?c experience (or specialization) (Velury et al., 2003).
Expertise allows auditors to identify and address industry-speci?c issues and problems
more comprehensively and, hence, obtain an advantage relative to auditors without
industry knowledge (Chaney et al., 1997; Velury et al., 2003).
Audit independence is de?ned as independence in fact and in appearance
(Richard, 2006). Independence in fact refers to attitudes of impartiality and objectivity,
while independence in appearance refers to perceptions by third parties that the auditor
Auditor
appointment
109
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
is capable of maintaining impartiality and capacity of judgment, and resisting
pressures from client management (Richard, 2006, p. 156).
Auditor reputation (image or brand-name) is important because, in the absence of
users’ ability to assess quality directly, audit ?rms with a well-known (unfamiliar)
reputation are regarded as providing a higher (lower) quality audit (Moizer, 1997).
Reputation provides information on service quality, and also represents a bond that the
“audit ?rm dissipates if it fails to supply the contracted-for quality” (Healy and Lys,
1986), the consequences of which are potential loss of reputation, audit fees and client
base (DeAngelo, 1981b; Francis and Wilson, 1988; Bedard et al., 2000; Citron and
Manalis, 2001; Chaney et al., 2004).
In addition, with respect to independence and reputation, NSW local councils have
accountability and stewardship relationships with the state government and
community as the councils’ stakeholders. Councils, therefore, are likely to value
perceptions of independence and an auditor’s reputation as a means of enhancing their
own reputation in the eyes of stakeholders (Healy and Lys, 1986).
Thus, we hypothesize that councils predisposed to rotate auditors at compulsory
audit tender will seek to align themselves with a quality auditor where a quality
auditor is proxied by ex ante observable characteristics of technical competence,
independence and reputation:
H1. Councils predisposed to rotate auditors at compulsory audit tender will rate
technical competence, independence and reputation as more important in the
auditor appointment decision compared to councils predisposed to retain their
incumbent auditor.
3. Method
3.1 Variable identi?cation
A review of the auditor choice literature, speci?cally the multi-attribute studies that
focus on auditor appointment from a behavioural perspective, and the sample tender
speci?cation provided to local councils by the Local Government Managers Australia
NSW, identi?ed a number of auditor (supply-side) and audit environmental (audit
engagement) attributes for inclusion in the survey[10].
Table I details a taxonomy of 48 attributes identi?ed from the literature and the
sample tender speci?cation which were used in constructing the survey
questionnaire[11]. The 48 attributes were categorized theoretically and nine broad
categories were identi?ed. These were four supply-side (auditor) attributes of audit ?rm
reputation, location, ability to provide non-audit services and technical competence; and
?ve audit environmental characteristics of the audit plan, audit fee, independence,
relationships with the incumbent audit ?rm and tender documents/process.
These nine categories are labeled “attribute groupings level 1” in column 2 of
Table I. These attribute groupings are used in the hypothesis development and
con?rmatory factor analysis. Column 3 classi?es each level 1 attribute grouping into
sub-groupings (labeled attribute groupings level 2), while column 4 details the
individual items that fall within each level 2 grouping (labeled attribute groupings
level 3 – survey items). These individual items are used in the survey questionnaire.
Column 5 shows each item’s question number in the questionnaire[12]. The last column
shows the references from which the attributes and survey items were developed.
ARJ
24,2
110
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
A
t
t
r
i
b
u
t
e
c
h
a
r
a
c
t
e
r
i
s
t
i
c
A
t
t
r
i
b
u
t
e
g
r
o
u
p
i
n
g
s
l
e
v
e
l
1
A
t
t
r
i
b
u
t
e
g
r
o
u
p
i
n
g
s
l
e
v
e
l
2
A
t
t
r
i
b
u
t
e
g
r
o
u
p
i
n
g
s
l
e
v
e
l
3
–
s
u
r
v
e
y
i
t
e
m
s
A
t
t
r
i
b
u
t
e
n
u
m
b
e
r
A
t
t
r
i
b
u
t
e
s
o
u
r
c
e
f
r
o
m
l
i
t
e
r
a
t
u
r
e
a
n
d
s
a
m
p
l
e
t
e
n
d
e
r
s
p
e
c
i
?
c
a
t
i
o
n
S
u
p
p
l
y
-
s
i
d
e
A
u
d
i
t
?
r
m
r
e
p
u
t
a
t
i
o
n
G
e
n
e
r
a
l
T
h
e
o
v
e
r
a
l
l
r
e
p
u
t
a
t
i
o
n
o
f
t
h
e
a
u
d
i
t
?
r
m
T
h
e
a
u
d
i
t
?
r
m
i
s
n
o
t
b
e
i
n
g
i
n
v
o
l
v
e
d
i
n
e
m
b
a
r
r
a
s
s
i
n
g
l
i
t
i
g
a
t
i
o
n
T
h
e
a
u
d
i
t
?
r
m
’
s
p
r
o
f
e
s
s
i
o
n
a
l
i
n
d
e
m
n
i
t
y
i
n
s
u
r
a
n
c
e
c
o
m
p
l
i
e
s
w
i
t
h
t
h
e
m
i
n
i
m
u
m
r
e
q
u
i
r
e
m
e
n
t
s
o
f
I
C
A
A
o
r
C
P
A
A
u
s
t
r
a
l
i
a
B
e
l
i
e
f
t
h
a
t
t
h
e
a
u
d
i
t
?
r
m
w
i
l
l
g
i
v
e
t
h
e
c
o
u
n
c
i
l
a
n
u
n
q
u
a
l
i
?
e
d
o
p
i
n
i
o
n
1
2
4
2
6
3
5
D
e
l
o
i
t
t
e
,
H
a
s
k
i
n
s
a
n
d
S
e
l
l
s
(
1
9
7
8
)
,
G
e
o
r
g
e
a
n
d
S
o
l
o
m
o
n
(
1
9
8
0
)
,
E
i
c
h
e
n
s
e
h
e
r
a
n
d
S
h
i
e
l
d
s
(
1
9
8
3
)
,
G
a
b
h
a
r
t
a
n
d
M
i
l
l
e
r
(
1
9
8
4
)
,
C
a
s
a
b
o
n
a
a
n
d
B
a
r
b
e
r
a
(
1
9
8
7
)
,
H
e
r
m
a
n
s
o
n
e
t
a
l
.
(
1
9
9
4
)
,
S
c
o
t
t
a
n
d
v
a
n
d
e
r
W
a
l
t
(
1
9
9
4
)
,
B
e
a
t
t
i
e
a
n
d
F
e
a
r
n
l
e
y
(
1
9
9
5
)
,
S
a
n
d
s
a
n
d
H
u
a
n
g
(
2
0
0
2
)
,
t
e
n
d
e
r
s
p
e
c
i
?
c
a
t
i
o
n
S
p
e
c
i
?
c
(
c
o
n
t
e
x
t
u
a
l
)
r
e
p
u
t
a
t
i
o
n
T
h
e
r
e
p
u
t
a
t
i
o
n
o
f
t
h
e
a
u
d
i
t
?
r
m
i
n
p
r
o
v
i
d
i
n
g
a
u
d
i
t
s
e
r
v
i
c
e
s
t
o
l
o
c
a
l
c
o
u
n
c
i
l
s
2
C
a
s
a
b
o
n
a
a
n
d
B
a
r
b
e
r
a
(
1
9
8
7
)
A
u
d
i
t
p
a
r
t
n
e
r
s
T
h
e
r
e
p
u
t
a
t
i
o
n
o
f
t
h
e
a
u
d
i
t
e
n
g
a
g
e
m
e
n
t
p
a
r
t
n
e
r
(
s
)
9
D
e
l
o
i
t
t
e
,
H
a
s
k
i
n
s
a
n
d
S
e
l
l
s
(
1
9
7
8
)
,
G
a
b
h
a
r
t
a
n
d
M
i
l
l
e
r
(
1
9
8
4
)
,
B
e
a
t
t
i
e
a
n
d
F
e
a
r
n
l
e
y
(
1
9
9
5
)
,
S
t
a
n
n
y
e
t
a
l
.
(
2
0
0
0
)
R
e
f
e
r
e
n
c
e
s
/
a
c
c
e
p
t
a
b
i
l
i
t
y
t
o
t
h
i
r
d
p
a
r
t
i
e
s
R
e
f
e
r
e
n
c
e
s
f
r
o
m
s
e
n
i
o
r
N
S
W
l
o
c
a
l
c
o
u
n
c
i
l
r
e
p
r
e
s
e
n
t
a
t
i
v
e
s
t
h
a
t
h
a
v
e
e
x
p
e
r
i
e
n
c
e
w
i
t
h
t
h
e
a
u
d
i
t
?
r
m
R
e
f
e
r
e
n
c
e
s
f
r
o
m
m
a
j
o
r
c
l
i
e
n
t
s
o
f
t
h
e
a
u
d
i
t
?
r
m
T
h
e
a
u
d
i
t
?
r
m
i
s
a
c
c
e
p
t
a
b
l
e
t
o
t
h
e
c
o
u
n
c
i
l
’
s
r
e
g
u
l
a
t
o
r
s
4
5
4
8
2
5
B
a
r
l
e
v
(
1
9
7
7
)
,
G
e
o
r
g
e
a
n
d
S
o
l
o
m
o
n
(
1
9
8
0
)
,
C
a
s
a
b
o
n
a
a
n
d
B
a
r
b
e
r
a
(
1
9
8
7
)
,
A
d
d
a
m
s
a
n
d
D
a
v
i
s
(
1
9
9
4
)
,
S
c
o
t
t
a
n
d
v
a
n
d
e
r
W
a
l
t
(
1
9
9
4
)
,
B
e
a
t
t
i
e
a
n
d
F
e
a
r
n
l
e
y
(
1
9
9
5
)
,
A
d
d
a
m
s
a
n
d
D
a
v
i
s
(
1
9
9
6
)
,
R
u
m
m
e
l
e
t
a
l
.
(
1
9
9
9
)
,
S
t
a
n
n
y
e
t
a
l
.
(
2
0
0
0
)
,
A
d
d
a
m
s
a
n
d
A
l
l
r
e
d
(
2
0
0
2
)
,
S
a
n
k
a
r
a
g
u
r
u
s
w
a
m
y
a
n
d
W
h
i
s
e
n
a
n
t
(
2
0
0
4
)
,
t
e
n
d
e
r
s
p
e
c
i
?
c
a
t
i
o
n
R
e
p
u
t
a
t
i
o
n
–
o
t
h
e
r
c
l
i
e
n
t
s
D
e
t
a
i
l
s
o
f
m
a
j
o
r
a
u
d
i
t
c
l
i
e
n
t
s
o
f
t
h
e
a
u
d
i
t
?
r
m
4
7
D
e
l
o
i
t
t
e
,
H
a
s
k
i
n
s
a
n
d
S
e
l
l
s
(
1
9
7
8
)
,
G
e
o
r
g
e
a
n
d
S
o
l
o
m
o
n
(
1
9
8
0
)
,
G
a
b
h
a
r
t
a
n
d
M
i
l
l
e
r
(
1
9
8
4
)
,
S
c
o
t
t
a
n
d
v
a
n
d
e
r
W
a
l
t
(
1
9
9
4
)
,
B
e
a
t
t
i
e
a
n
d
F
e
a
r
n
l
e
y
(
1
9
9
5
)
,
S
a
n
k
a
r
a
g
u
r
u
s
w
a
m
y
a
n
d
W
h
i
s
e
n
a
n
t
(
2
0
0
4
)
,
t
e
n
d
e
r
s
p
e
c
i
?
c
a
t
i
o
n
R
e
p
u
t
a
t
i
o
n
–
s
i
z
e
T
h
e
a
u
d
i
t
?
r
m
i
s
a
s
m
a
l
l
i
n
t
e
r
n
a
t
i
o
n
a
l
o
r
n
a
t
i
o
n
a
l
a
u
d
i
t
?
r
m
T
h
e
a
u
d
i
t
?
r
m
i
s
a
l
a
r
g
e
l
o
c
a
l
o
r
r
e
g
i
o
n
a
l
a
u
d
i
t
?
r
m
T
h
e
a
u
d
i
t
?
r
m
i
s
a
s
m
a
l
l
l
o
c
a
l
a
u
d
i
t
?
r
m
T
h
e
a
u
d
i
t
?
r
m
i
s
a
B
i
g
4
i
n
t
e
r
n
a
t
i
o
n
a
l
a
u
d
i
t
?
r
m
5
4
0
4
14
B
a
r
l
e
v
(
1
9
7
7
)
,
G
e
o
r
g
e
a
n
d
S
o
l
o
m
o
n
(
1
9
8
0
)
,
E
i
c
h
e
n
s
e
h
e
r
a
n
d
S
h
i
e
l
d
s
(
1
9
8
3
)
,
C
a
s
a
b
o
n
a
a
n
d
B
a
r
b
e
r
a
(
1
9
8
7
)
,
A
d
d
a
m
s
a
n
d
D
a
v
i
s
(
1
9
9
4
)
,
S
c
o
t
t
a
n
d
v
a
n
d
e
r
W
a
l
t
(
1
9
9
4
)
,
B
e
a
t
t
i
e
a
n
d
F
e
a
r
n
l
e
y
(
1
9
9
5
)
,
A
d
d
a
m
s
a
n
d
D
a
v
i
s
(
1
9
9
6
)
,
R
u
m
m
e
l
e
t
a
l
.
(
1
9
9
9
)
,
S
t
a
n
n
y
e
t
a
l
.
(
2
0
0
0
)
,
A
d
d
a
m
s
a
n
d
A
l
l
r
e
d
(
2
0
0
2
)
,
S
a
n
k
a
r
a
g
u
r
u
s
w
a
m
y
a
n
d
W
h
i
s
e
n
a
n
t
(
2
0
0
4
)
(
c
o
n
t
i
n
u
e
d
)
Table I.
Literature summary and
taxonomy of attributes
Auditor
appointment
111
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
A
t
t
r
i
b
u
t
e
c
h
a
r
a
c
t
e
r
i
s
t
i
c
A
t
t
r
i
b
u
t
e
g
r
o
u
p
i
n
g
s
l
e
v
e
l
1
A
t
t
r
i
b
u
t
e
g
r
o
u
p
i
n
g
s
l
e
v
e
l
2
A
t
t
r
i
b
u
t
e
g
r
o
u
p
i
n
g
s
l
e
v
e
l
3
–
s
u
r
v
e
y
i
t
e
m
s
A
t
t
r
i
b
u
t
e
n
u
m
b
e
r
A
t
t
r
i
b
u
t
e
s
o
u
r
c
e
f
r
o
m
l
i
t
e
r
a
t
u
r
e
a
n
d
s
a
m
p
l
e
t
e
n
d
e
r
s
p
e
c
i
?
c
a
t
i
o
n
L
o
c
a
t
i
o
n
L
o
c
a
t
i
o
n
T
h
e
a
u
d
i
t
?
r
m
h
a
s
a
n
o
f
?
c
e
i
n
c
l
o
s
e
p
r
o
x
i
m
i
t
y
t
o
t
h
e
c
o
u
n
c
i
l
7
D
e
l
o
i
t
t
e
,
H
a
s
k
i
n
s
a
n
d
S
e
l
l
s
(
1
9
7
8
)
,
G
e
o
r
g
e
a
n
d
S
o
l
o
m
o
n
(
1
9
8
0
)
,
E
i
c
h
e
n
s
e
h
e
r
a
n
d
S
h
i
e
l
d
s
(
1
9
8
3
)
,
C
a
s
a
b
o
n
a
a
n
d
B
a
r
b
e
r
a
(
1
9
8
7
)
,
A
d
d
a
m
s
a
n
d
D
a
v
i
s
(
1
9
9
4
,
1
9
9
6
)
,
B
e
a
t
t
i
e
a
n
d
F
e
a
r
n
l
e
y
(
1
9
9
5
,
1
9
9
8
b
)
,
R
u
m
m
e
l
e
t
a
l
.
(
1
9
9
9
)
,
S
t
a
n
n
y
e
t
a
l
.
(
2
0
0
0
)
,
A
d
d
a
m
s
a
n
d
A
l
l
r
e
d
(
2
0
0
2
)
,
S
a
n
d
s
a
n
d
H
u
a
n
g
(
2
0
0
2
)
,
S
a
n
d
s
a
n
d
M
c
P
h
a
i
l
(
2
0
0
3
)
,
S
a
n
k
a
r
a
g
u
r
u
s
w
a
m
y
a
n
d
W
h
i
s
e
n
a
n
t
(
2
0
0
4
)
A
b
i
l
i
t
y
t
o
p
r
o
v
i
d
e
N
A
S
N
A
S
–
o
p
e
r
a
t
i
o
n
a
l
T
h
e
c
a
p
a
b
i
l
i
t
y
o
f
t
h
e
a
u
d
i
t
?
r
m
t
o
p
r
o
v
i
d
e
n
o
n
-
a
u
d
i
t
s
e
r
v
i
c
e
s
s
u
c
h
a
s
o
p
e
r
a
t
i
o
n
a
l
a
u
d
i
t
s
a
n
d
/
o
r
c
o
n
s
u
l
t
i
n
g
s
e
r
v
i
c
e
s
3
B
a
r
l
e
v
(
1
9
7
7
)
,
D
e
l
o
i
t
t
e
,
H
a
s
k
i
n
s
a
n
d
S
e
l
l
s
(
1
9
7
8
)
,
G
e
o
r
g
e
a
n
d
S
o
l
o
m
o
n
(
1
9
8
0
)
,
E
i
c
h
e
n
s
e
h
e
r
a
n
d
S
h
i
e
l
d
s
(
1
9
8
3
)
,
G
a
b
h
a
r
t
a
n
d
M
i
l
l
e
r
(
1
9
8
4
)
,
C
a
s
a
b
o
n
a
a
n
d
B
a
r
b
e
r
a
(
1
9
8
7
)
,
A
d
d
a
m
s
a
n
d
D
a
v
i
s
(
1
9
9
4
,
1
9
9
6
)
,
S
c
o
t
t
a
n
d
v
a
n
d
e
r
W
a
l
t
(
1
9
9
4
)
,
B
e
a
t
t
i
e
a
n
d
F
e
a
r
n
l
e
y
(
1
9
9
5
)
,
R
u
m
m
e
l
e
t
a
l
.
(
1
9
9
9
)
,
S
t
a
n
n
y
e
t
a
l
.
(
2
0
0
0
)
,
A
d
d
a
m
s
a
n
d
A
l
l
r
e
d
(
2
0
0
2
)
,
S
a
n
d
s
a
n
d
H
u
a
n
g
(
2
0
0
2
)
,
S
a
n
d
s
a
n
d
M
c
P
h
a
i
l
(
2
0
0
3
)
,
t
e
n
d
e
r
s
p
e
c
i
?
c
a
t
i
o
n
N
A
S
–
g
e
n
e
r
a
l
l
y
T
e
c
h
n
i
c
a
l
c
o
m
p
e
t
e
n
c
e
T
e
c
h
n
i
c
a
l
c
o
m
p
e
t
e
n
c
e
–
q
u
a
l
i
?
c
a
t
i
o
n
s
T
h
e
t
e
c
h
n
i
c
a
l
q
u
a
l
i
?
c
a
t
i
o
n
s
o
f
t
h
e
p
r
o
p
o
s
e
d
a
u
d
i
t
e
n
g
a
g
e
m
e
n
t
p
a
r
t
n
e
r
(
s
)
T
h
e
t
e
c
h
n
i
c
a
l
q
u
a
l
i
?
c
a
t
i
o
n
s
o
f
t
h
e
p
r
o
p
o
s
e
d
a
u
d
i
t
t
e
a
m
m
a
n
a
g
e
r
(
s
)
1
0
1
1
D
e
l
o
i
t
t
e
,
H
a
s
k
i
n
s
a
n
d
S
e
l
l
s
(
1
9
7
8
)
,
E
i
c
h
e
n
s
e
h
e
r
a
n
d
S
h
i
e
l
d
s
(
1
9
8
3
)
,
B
e
a
t
t
i
e
a
n
d
F
e
a
r
n
l
e
y
(
1
9
9
5
)
,
A
d
d
a
m
s
a
n
d
D
a
v
i
s
(
1
9
9
6
)
,
S
t
a
n
n
y
e
t
a
l
.
(
2
0
0
0
)
,
A
d
d
a
m
s
a
n
d
A
l
l
r
e
d
(
2
0
0
2
)
,
S
a
n
d
s
a
n
d
M
c
P
h
a
i
l
(
2
0
0
3
)
,
t
e
n
d
e
r
s
p
e
c
i
?
c
a
t
i
o
n
T
h
e
t
e
c
h
n
i
c
a
l
q
u
a
l
i
?
c
a
t
i
o
n
s
o
f
t
h
e
p
r
o
p
o
s
e
d
a
u
d
i
t
t
e
a
m
s
u
p
e
r
v
i
s
o
r
(
s
)
1
2
T
e
c
h
n
i
c
a
l
c
o
m
p
e
t
e
n
c
e
–
e
x
p
e
r
i
e
n
c
e
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
p
r
o
p
o
s
e
d
a
u
d
i
t
e
n
g
a
g
e
m
e
n
t
p
a
r
t
n
e
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
a
u
d
i
t
s
g
e
n
e
r
a
l
l
y
2
0
D
e
l
o
i
t
t
e
,
H
a
s
k
i
n
s
a
n
d
S
e
l
l
s
(
1
9
7
8
)
,
E
i
c
h
e
n
s
e
h
e
r
a
n
d
S
h
i
e
l
d
s
(
1
9
8
3
)
,
G
a
b
h
a
r
t
a
n
d
M
i
l
l
e
r
(
1
9
8
4
)
,
C
a
s
a
b
o
n
a
a
n
d
B
a
r
b
e
r
a
(
1
9
8
7
)
,
S
a
n
d
s
a
n
d
M
c
P
h
a
i
l
(
2
0
0
3
)
,
t
e
n
d
e
r
s
p
e
c
i
?
c
a
t
i
o
n
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
p
r
o
p
o
s
e
d
a
u
d
i
t
m
a
n
a
g
e
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
a
u
d
i
t
s
g
e
n
e
r
a
l
l
y
2
9
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
p
r
o
p
o
s
e
d
a
u
d
i
t
t
e
a
m
s
u
p
e
r
v
i
s
o
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
a
u
d
i
t
s
g
e
n
e
r
a
l
l
y
3
2
(
c
o
n
t
i
n
u
e
d
)
Table I.
ARJ
24,2
112
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
A
t
t
r
i
b
u
t
e
c
h
a
r
a
c
t
e
r
i
s
t
i
c
A
t
t
r
i
b
u
t
e
g
r
o
u
p
i
n
g
s
l
e
v
e
l
1
A
t
t
r
i
b
u
t
e
g
r
o
u
p
i
n
g
s
l
e
v
e
l
2
A
t
t
r
i
b
u
t
e
g
r
o
u
p
i
n
g
s
l
e
v
e
l
3
–
s
u
r
v
e
y
i
t
e
m
s
A
t
t
r
i
b
u
t
e
n
u
m
b
e
r
A
t
t
r
i
b
u
t
e
s
o
u
r
c
e
f
r
o
m
l
i
t
e
r
a
t
u
r
e
a
n
d
s
a
m
p
l
e
t
e
n
d
e
r
s
p
e
c
i
?
c
a
t
i
o
n
T
e
c
h
n
i
c
a
l
c
o
m
p
e
t
e
n
c
e
–
e
x
p
e
r
t
i
s
e
a
u
d
i
t
?
r
m
l
e
v
e
l
T
h
e
a
u
d
i
t
?
r
m
i
s
c
o
n
s
i
d
e
r
e
d
t
o
b
e
a
s
p
e
c
i
a
l
i
s
t
i
n
l
o
c
a
l
g
o
v
e
r
n
m
e
n
t
a
u
d
i
t
D
e
t
a
i
l
s
o
f
o
t
h
e
r
c
o
u
n
c
i
l
s
c
u
r
r
e
n
t
l
y
a
u
d
i
t
e
d
b
y
t
h
e
a
u
d
i
t
?
r
m
6
4
4
D
e
l
o
i
t
t
e
,
H
a
s
k
i
n
s
a
n
d
S
e
l
l
s
(
1
9
7
8
)
,
G
e
o
r
g
e
a
n
d
S
o
l
o
m
o
n
(
1
9
8
0
)
,
E
i
c
h
e
n
s
e
h
e
r
a
n
d
S
h
i
e
l
d
s
(
1
9
8
3
)
,
G
a
b
h
a
r
t
a
n
d
M
i
l
l
e
r
(
1
9
8
4
)
,
C
a
s
a
b
o
n
a
a
n
d
B
a
r
b
e
r
a
(
1
9
8
7
)
,
H
e
r
m
a
n
s
o
n
e
t
a
l
.
(
1
9
9
4
)
,
S
c
o
t
t
a
n
d
v
a
n
d
e
r
W
a
l
t
(
1
9
9
4
)
,
B
e
a
t
t
i
e
a
n
d
F
e
a
r
n
l
e
y
(
1
9
9
5
)
,
R
u
m
m
e
l
e
t
a
l
.
(
1
9
9
9
)
,
S
a
n
d
s
a
n
d
H
u
a
n
g
(
2
0
0
2
)
,
S
t
a
n
n
y
e
t
a
l
.
(
2
0
0
0
)
,
A
d
d
a
m
s
a
n
d
A
l
l
r
e
d
(
2
0
0
2
)
,
S
a
n
d
s
a
n
d
M
c
P
h
a
i
l
(
2
0
0
3
)
,
S
a
n
k
a
r
a
g
u
r
u
s
w
a
m
y
a
n
d
W
h
i
s
e
n
a
n
t
(
2
0
0
4
)
,
t
e
n
d
e
r
s
p
e
c
i
?
c
a
t
i
o
n
T
e
c
h
n
i
c
a
l
c
o
m
p
e
t
e
n
c
e
–
e
x
p
e
r
t
i
s
e
i
n
d
i
v
i
d
u
a
l
l
e
v
e
l
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
p
r
o
p
o
s
e
d
a
u
d
i
t
e
n
g
a
g
e
m
e
n
t
p
a
r
t
n
e
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
l
o
c
a
l
g
o
v
e
r
n
m
e
n
t
a
u
d
i
t
s
2
1
D
e
l
o
i
t
t
e
,
H
a
s
k
i
n
s
a
n
d
S
e
l
l
s
(
1
9
7
8
)
,
G
a
b
h
a
r
t
a
n
d
M
i
l
l
e
r
(
1
9
8
4
)
,
A
d
d
a
m
s
a
n
d
D
a
v
i
s
(
1
9
9
4
,
1
9
9
6
)
,
t
e
n
d
e
r
s
p
e
c
i
?
c
a
t
i
o
n
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
p
r
o
p
o
s
e
d
a
u
d
i
t
m
a
n
a
g
e
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
l
o
c
a
l
g
o
v
e
r
n
m
e
n
t
a
u
d
i
t
s
3
0
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
p
r
o
p
o
s
e
d
a
u
d
i
t
t
e
a
m
s
u
p
e
r
v
i
s
o
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
l
o
c
a
l
g
o
v
e
r
n
m
e
n
t
a
u
d
i
t
s
3
3
E
n
v
i
r
o
n
m
e
n
t
a
l
A
u
d
i
t
p
l
a
n
G
e
n
e
r
a
l
T
h
e
d
e
t
a
i
l
a
n
d
c
o
m
p
l
e
t
e
n
e
s
s
o
f
t
h
e
p
r
o
p
o
s
e
d
a
u
d
i
t
p
l
a
n
1
3
G
a
b
h
a
r
t
a
n
d
M
i
l
l
e
r
(
1
9
8
4
)
A
u
d
i
t
a
p
p
r
o
a
c
h
/
s
t
r
a
t
e
g
y
T
h
e
n
a
t
u
r
e
o
f
t
h
e
p
r
o
p
o
s
e
d
a
u
d
i
t
a
p
p
r
o
a
c
h
1
4
C
a
s
a
b
o
n
a
a
n
d
B
a
r
b
e
r
a
(
1
9
8
7
)
A
u
d
i
t
t
e
c
h
n
o
l
o
g
y
/
a
u
d
i
t
s
t
r
u
c
t
u
r
e
/
c
o
m
p
u
t
e
r
a
u
d
i
t
T
h
e
c
o
m
p
u
t
e
r
a
u
d
i
t
c
a
p
a
b
i
l
i
t
y
o
f
t
h
e
a
u
d
i
t
?
r
m
2
3
D
e
l
o
i
t
t
e
,
H
a
s
k
i
n
s
a
n
d
S
e
l
l
s
(
1
9
7
8
)
,
B
e
a
t
t
i
e
a
n
d
F
e
a
r
n
l
e
y
(
1
9
9
5
)
,
t
e
n
d
e
r
s
p
e
c
i
?
c
a
t
i
o
n
A
u
d
i
t
t
i
m
i
n
g
T
h
e
p
r
o
p
o
s
e
d
t
i
m
i
n
g
o
f
a
u
d
i
t
w
o
r
k
i
n
t
e
r
m
s
o
f
t
h
e
n
u
m
b
e
r
,
d
u
r
a
t
i
o
n
a
n
d
a
p
p
r
o
x
i
m
a
t
e
d
a
t
e
o
f
v
i
s
i
t
s
b
y
t
h
e
a
u
d
i
t
?
r
m
1
6
C
a
s
a
b
o
n
a
a
n
d
B
a
r
b
e
r
a
(
1
9
8
7
)
,
t
e
n
d
e
r
s
p
e
c
i
?
c
a
t
i
o
n
A
u
d
i
t
h
o
u
r
s
T
h
e
p
r
o
p
o
s
e
d
n
u
m
b
e
r
o
f
h
o
u
r
s
t
o
c
o
n
d
u
c
t
t
h
e
a
u
d
i
t
(
f
r
o
m
t
h
e
b
e
g
i
n
n
i
n
g
o
f
?
e
l
d
w
o
r
k
t
o
t
h
e
a
u
d
i
t
r
e
p
o
r
t
d
a
t
e
)
1
5
C
a
s
a
b
o
n
a
a
n
d
B
a
r
b
e
r
a
(
1
9
8
7
)
,
t
e
n
d
e
r
s
p
e
c
i
?
c
a
t
i
o
n
T
h
e
p
r
o
p
o
s
e
d
i
n
v
o
l
v
e
m
e
n
t
o
f
t
h
e
a
u
d
i
t
p
a
r
t
n
e
r
(
s
)
i
n
t
h
e
c
o
n
d
u
c
t
o
f
t
h
e
a
u
d
i
t
i
n
t
e
r
m
s
o
f
e
s
t
i
m
a
t
e
d
a
u
d
i
t
h
o
u
r
s
2
2
(
c
o
n
t
i
n
u
e
d
)
Table I.
Auditor
appointment
113
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
A
t
t
r
i
b
u
t
e
c
h
a
r
a
c
t
e
r
i
s
t
i
c
A
t
t
r
i
b
u
t
e
g
r
o
u
p
i
n
g
s
l
e
v
e
l
1
A
t
t
r
i
b
u
t
e
g
r
o
u
p
i
n
g
s
l
e
v
e
l
2
A
t
t
r
i
b
u
t
e
g
r
o
u
p
i
n
g
s
l
e
v
e
l
3
–
s
u
r
v
e
y
i
t
e
m
s
A
t
t
r
i
b
u
t
e
n
u
m
b
e
r
A
t
t
r
i
b
u
t
e
s
o
u
r
c
e
f
r
o
m
l
i
t
e
r
a
t
u
r
e
a
n
d
s
a
m
p
l
e
t
e
n
d
e
r
s
p
e
c
i
?
c
a
t
i
o
n
T
h
e
p
r
o
p
o
s
e
d
i
n
v
o
l
v
e
m
e
n
t
o
f
t
h
e
a
u
d
i
t
m
a
n
a
g
e
r
(
s
)
i
n
t
h
e
c
o
n
d
u
c
t
o
f
t
h
e
a
u
d
i
t
i
n
t
e
r
m
s
o
f
e
s
t
i
m
a
t
e
d
a
u
d
i
t
h
o
u
r
s
3
1
T
h
e
p
r
o
p
o
s
e
d
i
n
v
o
l
v
e
m
e
n
t
o
f
t
h
e
a
u
d
i
t
t
e
a
m
s
u
p
e
r
v
i
s
o
r
(
s
)
i
n
t
h
e
c
o
n
d
u
c
t
o
f
t
h
e
a
u
d
i
t
i
n
t
e
r
m
s
o
f
e
s
t
i
m
a
t
e
d
a
u
d
i
t
h
o
u
r
s
3
4
A
u
d
i
t
f
e
e
A
u
d
i
t
f
e
e
T
h
e
c
o
m
p
e
t
i
t
i
v
e
n
e
s
s
o
f
t
h
e
p
r
i
c
i
n
g
s
t
r
u
c
t
u
r
e
o
f
t
h
e
a
u
d
i
t
?
r
m
f
o
r
t
h
e
p
r
o
v
i
s
i
o
n
o
f
a
u
d
i
t
s
e
r
v
i
c
e
s
T
h
e
a
u
d
i
t
f
e
e
e
s
t
i
m
a
t
e
p
r
o
v
i
d
e
d
b
y
t
h
e
a
u
d
i
t
?
r
m
i
s
c
o
m
m
e
n
s
u
r
a
t
e
w
i
t
h
t
h
e
a
u
d
i
t
w
o
r
k
r
e
q
u
i
r
e
d
1
7
1
8
G
e
o
r
g
e
a
n
d
S
o
l
o
m
o
n
(
1
9
8
0
)
,
C
a
s
a
b
o
n
a
a
n
d
B
a
r
b
e
r
a
(
1
9
8
7
)
,
A
d
d
a
m
s
a
n
d
D
a
v
i
s
(
1
9
9
4
)
,
H
e
r
m
a
n
s
o
n
e
t
a
l
.
(
1
9
9
4
)
,
S
c
o
t
t
a
n
d
v
a
n
d
e
r
W
a
l
t
(
1
9
9
4
)
,
B
e
a
t
t
i
e
a
n
d
F
e
a
r
n
l
e
y
(
1
9
9
5
,
1
9
9
8
b
)
,
A
d
d
a
m
s
a
n
d
D
a
v
i
s
(
1
9
9
6
)
,
R
u
m
m
e
l
e
t
a
l
.
(
1
9
9
9
)
,
S
t
a
n
n
y
e
t
a
l
.
(
2
0
0
0
)
,
A
d
d
a
m
s
a
n
d
A
l
l
r
e
d
(
2
0
0
2
)
,
S
a
n
d
s
a
n
d
H
u
a
n
g
(
2
0
0
2
)
,
S
a
n
d
s
a
n
d
M
c
P
h
a
i
l
(
2
0
0
3
)
,
S
a
n
k
a
r
a
g
u
r
u
s
w
a
m
y
a
n
d
W
h
i
s
e
n
a
n
t
(
2
0
0
4
)
,
t
e
n
d
e
r
s
p
e
c
i
?
c
a
t
i
o
n
I
n
d
e
p
e
n
d
e
n
c
e
I
n
d
e
p
e
n
d
e
n
c
e
T
h
e
i
n
d
e
p
e
n
d
e
n
c
e
o
f
t
h
e
a
u
d
i
t
?
r
m
f
r
o
m
y
o
u
r
c
o
u
n
c
i
l
1
9
B
a
r
l
e
v
(
1
9
7
7
)
,
G
e
o
r
g
e
a
n
d
S
o
l
o
m
o
n
(
1
9
8
0
)
,
E
i
c
h
e
n
s
e
h
e
r
a
n
d
S
h
i
e
l
d
s
(
1
9
8
3
)
,
G
a
b
h
a
r
t
a
n
d
M
i
l
l
e
r
(
1
9
8
4
)
,
C
a
s
a
b
o
n
a
a
n
d
B
a
r
b
e
r
a
(
1
9
8
7
)
,
A
d
d
a
m
s
a
n
d
D
a
v
i
s
(
1
9
9
4
,
1
9
9
6
)
,
S
c
o
t
t
a
n
d
v
a
n
d
e
r
W
a
l
t
(
1
9
9
4
)
,
B
e
a
t
t
i
e
a
n
d
F
e
a
r
n
l
e
y
(
1
9
9
8
b
)
,
S
t
a
n
n
y
e
t
a
l
.
(
2
0
0
0
)
,
A
d
d
a
m
s
a
n
d
A
l
l
r
e
d
(
2
0
0
2
)
R
e
l
a
t
i
o
n
s
h
i
p
s
w
i
t
h
t
h
e
i
n
c
u
m
b
e
n
t
a
u
d
i
t
?
r
m
I
n
c
u
m
b
e
n
t
a
u
d
i
t
o
r
P
r
e
v
i
o
u
s
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
a
u
d
i
t
?
r
m
w
i
t
h
y
o
u
r
c
o
u
n
c
i
l
a
s
a
n
i
n
c
u
m
b
e
n
t
a
u
d
i
t
o
r
8
D
e
l
o
i
t
t
e
,
H
a
s
k
i
n
s
a
n
d
S
e
l
l
s
(
1
9
7
8
)
,
E
i
c
h
e
n
s
e
h
e
r
a
n
d
S
h
i
e
l
d
s
(
1
9
8
3
)
,
G
a
b
h
a
r
t
a
n
d
M
i
l
l
e
r
(
1
9
8
4
)
,
C
a
s
a
b
o
n
a
a
n
d
B
a
r
b
e
r
a
(
1
9
8
7
)
,
S
c
o
t
t
a
n
d
v
a
n
d
e
r
W
a
l
t
(
1
9
9
4
)
,
B
e
a
t
t
i
e
a
n
d
F
e
a
r
n
l
e
y
(
1
9
9
5
,
1
9
9
8
b
)
,
R
u
m
m
e
l
e
t
a
l
.
(
1
9
9
9
)
,
S
t
a
n
n
y
e
t
a
l
.
(
2
0
0
0
)
,
S
a
n
d
s
a
n
d
M
c
P
h
a
i
l
(
2
0
0
3
)
,
S
a
n
k
a
r
a
g
u
r
u
s
w
a
m
y
a
n
d
W
h
i
s
e
n
a
n
t
(
2
0
0
4
)
Q
u
a
l
i
t
y
o
f
w
o
r
k
i
n
g
r
e
l
a
t
i
o
n
s
h
i
p
w
i
t
h
a
u
d
i
t
p
a
r
t
n
e
r
s
2
7
Q
u
a
l
i
t
y
o
f
w
o
r
k
i
n
g
r
e
l
a
t
i
o
n
s
h
i
p
s
w
i
t
h
a
u
d
i
t
e
n
g
a
g
e
m
e
n
t
s
t
a
f
f
2
8
T
h
e
q
u
a
l
i
t
y
o
f
t
h
e
a
u
d
i
t
?
r
m
’
s
a
d
v
i
c
e
t
o
c
o
u
n
c
i
l
m
a
n
a
g
e
m
e
n
t
,
i
n
c
l
u
d
i
n
g
m
a
n
a
g
e
m
e
n
t
l
e
t
t
e
r
s
,
i
n
t
e
r
n
a
l
c
o
n
t
r
o
l
r
e
p
o
r
t
s
3
9
T
h
e
o
v
e
r
a
l
l
q
u
a
l
i
t
y
o
f
s
e
r
v
i
c
e
p
r
o
v
i
d
e
d
b
y
t
h
e
a
u
d
i
t
?
r
m
3
8
(
c
o
n
t
i
n
u
e
d
)
Table I.
ARJ
24,2
114
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
A
t
t
r
i
b
u
t
e
c
h
a
r
a
c
t
e
r
i
s
t
i
c
A
t
t
r
i
b
u
t
e
g
r
o
u
p
i
n
g
s
l
e
v
e
l
1
A
t
t
r
i
b
u
t
e
g
r
o
u
p
i
n
g
s
l
e
v
e
l
2
A
t
t
r
i
b
u
t
e
g
r
o
u
p
i
n
g
s
l
e
v
e
l
3
–
s
u
r
v
e
y
i
t
e
m
s
A
t
t
r
i
b
u
t
e
n
u
m
b
e
r
A
t
t
r
i
b
u
t
e
s
o
u
r
c
e
f
r
o
m
l
i
t
e
r
a
t
u
r
e
a
n
d
s
a
m
p
l
e
t
e
n
d
e
r
s
p
e
c
i
?
c
a
t
i
o
n
T
h
e
a
c
c
e
s
s
i
b
i
l
i
t
y
o
f
t
h
e
p
a
r
t
n
e
r
-
i
n
-
c
h
a
r
g
e
o
f
t
h
e
e
n
g
a
g
e
m
e
n
t
3
6
T
h
e
a
b
i
l
i
t
y
o
f
t
h
e
a
u
d
i
t
p
a
r
t
n
e
r
t
o
m
e
e
t
d
e
a
d
l
i
n
e
s
3
7
T
e
n
d
e
r
d
o
c
u
m
e
n
t
s
/
p
r
o
c
e
s
s
T
e
n
d
e
r
p
r
o
p
o
s
a
l
T
h
e
q
u
a
l
i
t
y
o
f
t
h
e
a
u
d
i
t
?
r
m
’
s
w
r
i
t
t
e
n
t
e
n
d
e
r
p
r
o
p
o
s
a
l
4
2
A
d
d
a
m
s
a
n
d
D
a
v
i
s
(
1
9
9
4
,
1
9
9
6
)
,
B
e
a
t
t
i
e
a
n
d
F
e
a
r
n
l
e
y
(
1
9
9
8
b
)
,
S
t
a
n
n
y
e
t
a
l
.
(
2
0
0
0
)
,
A
d
d
a
m
s
a
n
d
A
l
l
r
e
d
(
2
0
0
2
)
,
S
a
n
d
s
a
n
d
M
c
P
h
a
i
l
(
2
0
0
3
)
,
S
a
n
k
a
r
a
g
u
r
u
s
w
a
m
y
a
n
d
W
h
i
s
e
n
a
n
t
(
2
0
0
4
)
T
h
e
q
u
a
l
i
t
y
o
f
t
h
e
a
u
d
i
t
?
r
m
’
s
o
r
a
l
p
r
e
s
e
n
t
a
t
i
o
n
4
3
T
h
e
p
e
r
s
o
n
a
l
r
e
l
a
t
i
o
n
s
h
i
p
s
e
s
t
a
b
l
i
s
h
e
d
b
e
t
w
e
e
n
t
h
e
a
u
d
i
t
?
r
m
s
k
e
y
p
e
o
p
l
e
a
n
d
c
o
u
n
c
i
l
m
a
n
a
g
e
m
e
n
t
d
u
r
i
n
g
t
h
e
t
e
n
d
e
r
p
r
o
c
e
s
s
4
6
Table I.
Auditor
appointment
115
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
Table II presents the taxonomy used for the sensitivity analysis. This taxonomy was
the nine categories in the sample tender speci?cation:
(1) capacity-including quality and availability of workforce;
(2) quality and depth of audit performance and experience;
(3) proposed audit plan;
(4) price;
(5) value-added services;
(6) technical expertise;
(7) referees;
(8) tender proposal process; and
(9) other.
These nine categories are shown in column 1 of Table II. Column 2 classi?es each
category into sub-categories which column 3 describes as being either a supply-side
(auditor) or environmental (audit engagement) characteristic. Column 4 shows the order
in which the attributes were presented in the survey, while column 5 details the
description of each of the 48 items used in the survey.
3.2 Survey design and administration
The survey questionnaire used closed-form questions and consisted of two sections.
The ?rst asked respondents to rate the importance of the 48 attributes using a
seven-point Likert-type scale with anchors ranging from minus three (very
unimportant) to plus three (very important), with a neutral response (zero) being the
mid-point of the scale[13].
Similar to Beattie and Fearnley (1995), questions were framed as a generic task and no
reference was made tothe council’s incumbent auditor. Respondents were askedtoassume
that tenders for audit services had been called by their council and they were involved in
selecting an auditor (either reappointing the incumbent or appointing a new auditor).
Respondents were asked “to what extent each auditor attribute is important in your
auditor appointment decision”. The order of the 48 attributes was randomized both within
and across attribute groupings to overcome potential bias of demand characteristics or
halo effect. Some similar items were grouped together (e.g. items concerning the audit
partner) to avoid the respondent having to change “mind-sets” too often.
The second section of the questionnaire contained demographic questions:
.
the length of time the respondent had been in the position of ?nance manager;
.
council size in terms of population and revenue;
.
whether the council was metropolitan or non-metropolitan;
.
the type of incumbent audit ?rm;
.
the length of the incumbent auditor’s tenure; and
.
the report type of the council’s last audit (modi?ed or unmodi?ed).
Respondents were also asked the number of bids that would be expected if their council
were calling for tenders at the time of the survey, and their preferred outcome
ARJ
24,2
116
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
C
a
t
e
g
o
r
y
a
s
p
e
r
t
e
n
d
e
r
s
p
e
c
i
?
c
a
t
i
o
n
S
u
b
-
c
a
t
e
g
o
r
y
A
t
t
r
i
b
u
t
e
c
l
a
s
s
i
?
c
a
t
i
o
n
S
u
r
v
e
y
a
t
t
r
i
b
u
t
e
n
o
.
S
u
r
v
e
y
a
t
t
r
i
b
u
t
e
d
e
s
c
r
i
p
t
i
o
n
C
a
p
a
c
i
t
y
–
i
n
c
l
u
d
i
n
g
q
u
a
l
i
t
y
a
n
d
a
v
a
i
l
a
b
i
l
i
t
y
o
f
w
o
r
k
f
o
r
c
e
T
e
c
h
n
i
c
a
l
q
u
a
l
i
?
c
a
t
i
o
n
s
S
u
p
p
l
y
-
s
i
d
e
1
0
T
h
e
t
e
c
h
n
i
c
a
l
q
u
a
l
i
?
c
a
t
i
o
n
s
o
f
t
h
e
a
u
d
i
t
e
n
g
a
g
e
m
e
n
t
p
a
r
t
n
e
r
(
s
)
1
1
T
h
e
t
e
c
h
n
i
c
a
l
q
u
a
l
i
?
c
a
t
i
o
n
s
o
f
t
h
e
a
u
d
i
t
t
e
a
m
m
a
n
a
g
e
r
(
s
)
1
2
T
h
e
t
e
c
h
n
i
c
a
l
q
u
a
l
i
?
c
a
t
i
o
n
s
o
f
t
h
e
a
u
d
i
t
t
e
a
m
s
u
p
e
r
v
i
s
o
r
(
s
)
A
v
a
i
l
a
b
i
l
i
t
y
–
p
r
o
p
o
s
e
d
i
n
v
o
l
v
e
m
e
n
t
o
f
a
u
d
i
t
t
e
a
m
E
n
v
i
r
o
n
m
e
n
t
a
l
2
2
T
h
e
p
r
o
p
o
s
e
d
i
n
v
o
l
v
e
m
e
n
t
o
f
t
h
e
a
u
d
i
t
p
a
r
t
n
e
r
(
s
)
i
n
t
h
e
c
o
n
d
u
c
t
o
f
t
h
e
a
u
d
i
t
i
n
t
e
r
m
s
o
f
e
s
t
i
m
a
t
e
d
a
u
d
i
t
h
o
u
r
s
3
1
T
h
e
p
r
o
p
o
s
e
d
i
n
v
o
l
v
e
m
e
n
t
o
f
t
h
e
a
u
d
i
t
m
a
n
a
g
e
r
(
s
)
i
n
t
h
e
c
o
n
d
u
c
t
o
f
t
h
e
a
u
d
i
t
i
n
t
e
r
m
s
o
f
e
s
t
i
m
a
t
e
d
a
u
d
i
t
h
o
u
r
s
3
4
T
h
e
p
r
o
p
o
s
e
d
i
n
v
o
l
v
e
m
e
n
t
o
f
t
h
e
a
u
d
i
t
t
e
a
m
s
u
p
e
r
v
i
s
o
r
(
s
)
i
n
t
h
e
c
o
n
d
u
c
t
o
f
t
h
e
a
u
d
i
t
i
n
t
e
r
m
s
o
f
e
s
t
i
m
a
t
e
d
a
u
d
i
t
h
o
u
r
s
Q
u
a
l
i
t
y
a
n
d
d
e
p
t
h
o
f
a
u
d
i
t
p
e
r
f
o
r
m
a
n
c
e
a
n
d
e
x
p
e
r
i
e
n
c
e
P
r
i
o
r
e
x
p
e
r
i
e
n
c
e
w
i
t
h
a
u
d
i
t
?
r
m
E
n
v
i
r
o
n
m
e
n
t
a
l
8
P
r
e
v
i
o
u
s
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
a
u
d
i
t
?
r
m
w
i
t
h
y
o
u
r
c
o
u
n
c
i
l
a
s
i
n
c
u
m
b
e
n
t
a
u
d
i
t
o
r
D
e
p
t
h
o
f
a
u
d
i
t
e
x
p
e
r
i
e
n
c
e
–
?
r
m
4
7
D
e
t
a
i
l
s
o
f
m
a
j
o
r
a
u
d
i
t
c
l
i
e
n
t
s
o
f
t
h
e
a
u
d
i
t
?
r
m
D
e
p
t
h
o
f
a
u
d
i
t
e
x
p
e
r
i
e
n
c
e
–
t
e
a
m
2
0
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
a
u
d
i
t
e
n
g
a
g
e
m
e
n
t
p
a
r
t
n
e
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
a
u
d
i
t
s
g
e
n
e
r
a
l
l
y
Q
u
a
l
i
t
y
o
f
p
e
r
f
o
r
m
a
n
c
e
o
f
a
u
d
i
t
?
r
m
a
n
d
/
o
r
s
t
a
f
f
2
9
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
a
u
d
i
t
m
a
n
a
g
e
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
a
u
d
i
t
s
g
e
n
e
r
a
l
l
y
3
2
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
a
u
d
i
t
t
e
a
m
s
u
p
e
r
v
i
s
o
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
a
u
d
i
t
s
g
e
n
e
r
a
l
l
y
3
8
T
h
e
o
v
e
r
a
l
l
q
u
a
l
i
t
y
o
f
a
u
d
i
t
s
e
r
v
i
c
e
s
p
r
o
v
i
d
e
d
b
y
t
h
e
a
u
d
i
t
?
r
m
3
9
T
h
e
q
u
a
l
i
t
y
o
f
t
h
e
a
u
d
i
t
?
r
m
’
s
a
d
v
i
c
e
t
o
c
o
u
n
c
i
l
m
a
n
a
g
e
m
e
n
t
,
i
n
c
l
u
d
i
n
g
m
a
n
a
g
e
m
e
n
t
l
e
t
t
e
r
s
,
i
n
t
e
r
n
a
l
c
o
n
t
r
o
l
r
e
p
o
r
t
s
3
7
T
h
e
a
b
i
l
i
t
y
o
f
t
h
e
a
u
d
i
t
p
a
r
t
n
e
r
(
s
)
t
o
m
e
e
t
d
e
a
d
l
i
n
e
s
P
r
o
p
o
s
e
d
a
u
d
i
t
p
l
a
n
G
e
n
e
r
a
l
a
u
d
i
t
p
l
a
n
E
n
v
i
r
o
n
m
e
n
t
a
l
1
3
T
h
e
d
e
t
a
i
l
a
n
d
c
o
m
p
l
e
t
e
n
e
s
s
o
f
t
h
e
p
r
o
p
o
s
e
d
a
u
d
i
t
p
l
a
n
A
u
d
i
t
a
p
p
r
o
a
c
h
/
s
t
r
a
t
e
g
y
1
4
T
h
e
n
a
t
u
r
e
o
f
t
h
e
p
r
o
p
o
s
e
d
a
u
d
i
t
a
p
p
r
o
a
c
h
A
u
d
i
t
h
o
u
r
s
1
5
T
h
e
p
r
o
p
o
s
e
d
n
u
m
b
e
r
o
f
h
o
u
r
s
t
o
c
o
n
d
u
c
t
t
h
e
a
u
d
i
t
(
f
r
o
m
t
h
e
b
e
g
i
n
n
i
n
g
o
f
?
e
l
d
w
o
r
k
t
o
t
h
e
a
u
d
i
t
r
e
p
o
r
t
d
a
t
e
)
(
c
o
n
t
i
n
u
e
d
)
Table II.
Taxonomy of attributes
classi?ed according to the
sample tender
speci?cation
Auditor
appointment
117
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
C
a
t
e
g
o
r
y
a
s
p
e
r
t
e
n
d
e
r
s
p
e
c
i
?
c
a
t
i
o
n
S
u
b
-
c
a
t
e
g
o
r
y
A
t
t
r
i
b
u
t
e
c
l
a
s
s
i
?
c
a
t
i
o
n
S
u
r
v
e
y
a
t
t
r
i
b
u
t
e
n
o
.
S
u
r
v
e
y
a
t
t
r
i
b
u
t
e
d
e
s
c
r
i
p
t
i
o
n
A
u
d
i
t
t
i
m
i
n
g
C
o
m
p
u
t
e
r
a
u
d
i
t
c
a
p
a
b
i
l
i
t
y
1
6
T
h
e
p
r
o
p
o
s
e
d
t
i
m
i
n
g
o
f
a
u
d
i
t
w
o
r
k
i
n
t
e
r
m
s
o
f
t
h
e
n
u
m
b
e
r
,
d
u
r
a
t
i
o
n
a
n
d
a
p
p
r
o
x
i
m
a
t
e
d
a
t
e
o
f
v
i
s
i
t
s
b
y
t
h
e
a
u
d
i
t
?
r
m
2
3
T
h
e
c
o
m
p
u
t
e
r
a
u
d
i
t
c
a
p
a
b
i
l
i
t
y
o
f
t
h
e
a
u
d
i
t
?
r
m
P
r
i
c
e
C
o
m
p
e
t
i
t
i
v
e
n
e
s
s
o
f
a
u
d
i
t
f
e
e
E
n
v
i
r
o
n
m
e
n
t
a
l
1
7
T
h
e
c
o
m
p
e
t
i
t
i
v
e
n
e
s
s
o
f
t
h
e
p
r
i
c
i
n
g
s
t
r
u
c
t
u
r
e
o
f
t
h
e
a
u
d
i
t
?
r
m
f
o
r
t
h
e
p
r
o
v
i
s
i
o
n
o
f
a
u
d
i
t
s
e
r
v
i
c
e
s
A
u
d
i
t
f
e
e
c
o
m
m
e
n
s
u
r
a
t
e
w
i
t
h
a
q
u
a
l
i
t
y
a
u
d
i
t
1
8
T
h
e
a
u
d
i
t
f
e
e
e
s
t
i
m
a
t
e
p
r
o
v
i
d
e
d
b
y
t
h
e
a
u
d
i
t
?
r
m
i
s
c
o
m
m
e
n
s
u
r
a
t
e
w
i
t
h
t
h
e
a
u
d
i
t
w
o
r
k
r
e
q
u
i
r
e
d
V
a
l
u
e
-
a
d
d
e
d
s
e
r
v
i
c
e
s
N
o
n
-
a
u
d
i
t
s
e
r
v
i
c
e
s
S
u
p
p
l
y
-
s
i
d
e
3
T
h
e
c
a
p
a
b
i
l
i
t
y
o
f
t
h
e
a
u
d
i
t
?
r
m
t
o
p
r
o
v
i
d
e
n
o
n
-
a
u
d
i
t
s
e
r
v
i
c
e
s
s
u
c
h
a
s
o
p
e
r
a
t
i
o
n
a
l
a
u
d
i
t
s
a
n
d
/
o
r
c
o
n
s
u
l
t
i
n
g
s
e
r
v
i
c
e
s
Q
u
a
l
i
t
y
o
f
w
o
r
k
i
n
g
r
e
l
a
t
i
o
n
s
h
i
p
s
E
n
v
i
r
o
n
m
e
n
t
a
l
2
7
Q
u
a
l
i
t
y
o
f
w
o
r
k
i
n
g
r
e
l
a
t
i
o
n
s
h
i
p
w
i
t
h
t
h
e
a
u
d
i
t
p
a
r
t
n
e
r
(
s
)
2
8
Q
u
a
l
i
t
y
o
f
w
o
r
k
i
n
g
r
e
l
a
t
i
o
n
s
h
i
p
s
w
i
t
h
t
h
e
a
u
d
i
t
e
n
g
a
g
e
m
e
n
t
s
t
a
f
f
3
6
T
h
e
a
c
c
e
s
s
i
b
i
l
i
t
y
o
f
t
h
e
p
a
r
t
n
e
r
(
s
)
-
i
n
-
c
h
a
r
g
e
o
f
t
h
e
e
n
g
a
g
e
m
e
n
t
T
e
c
h
n
i
c
a
l
e
x
p
e
r
t
i
s
e
E
x
p
e
r
t
i
s
e
–
?
r
m
S
u
p
p
l
y
-
s
i
d
e
6
T
h
e
a
u
d
i
t
?
r
m
i
s
c
o
n
s
i
d
e
r
e
d
t
o
b
e
a
s
p
e
c
i
a
l
i
s
t
i
n
l
o
c
a
l
g
o
v
e
r
n
m
e
n
t
a
u
d
i
t
4
4
D
e
t
a
i
l
s
o
f
o
t
h
e
r
c
o
u
n
c
i
l
s
c
u
r
r
e
n
t
l
y
a
u
d
i
t
e
d
b
y
t
h
e
a
u
d
i
t
?
r
m
E
x
p
e
r
t
i
s
e
–
t
e
a
m
2
1
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
a
u
d
i
t
e
n
g
a
g
e
m
e
n
t
p
a
r
t
n
e
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
l
o
c
a
l
g
o
v
e
r
n
m
e
n
t
a
u
d
i
t
s
3
0
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
a
u
d
i
t
m
a
n
a
g
e
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
l
o
c
a
l
g
o
v
e
r
n
m
e
n
t
a
u
d
i
t
s
3
3
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
a
u
d
i
t
t
e
a
m
s
u
p
e
r
v
i
s
o
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
l
o
c
a
l
g
o
v
e
r
n
m
e
n
t
a
u
d
i
t
s
R
e
f
e
r
e
e
s
R
e
f
e
r
e
n
c
e
s
S
u
p
p
l
y
-
s
i
d
e
4
5
R
e
f
e
r
e
n
c
e
s
f
r
o
m
s
e
n
i
o
r
N
S
W
l
o
c
a
l
c
o
u
n
c
i
l
r
e
p
r
e
s
e
n
t
a
t
i
v
e
s
t
h
a
t
h
a
v
e
e
x
p
e
r
i
e
n
c
e
w
i
t
h
t
h
e
a
u
d
i
t
?
r
m
4
8
R
e
f
e
r
e
n
c
e
s
f
r
o
m
m
a
j
o
r
a
u
d
i
t
c
l
i
e
n
t
s
o
f
t
h
e
a
u
d
i
t
?
r
m
2
5
T
h
e
a
u
d
i
t
?
r
m
i
s
a
c
c
e
p
t
a
b
l
e
t
o
t
h
e
c
o
u
n
c
i
l
’
s
r
e
g
u
l
a
t
o
r
s
T
e
n
d
e
r
p
r
o
p
o
s
a
l
p
r
o
c
e
s
s
T
e
n
d
e
r
p
r
o
p
o
s
a
l
p
r
o
c
e
s
s
E
n
v
i
r
o
n
m
e
n
t
a
l
4
2
T
h
e
q
u
a
l
i
t
y
o
f
t
h
e
a
u
d
i
t
?
r
m
’
s
w
r
i
t
t
e
n
t
e
n
d
e
r
p
r
o
p
o
s
a
l
4
3
T
h
e
q
u
a
l
i
t
y
o
f
t
h
e
a
u
d
i
t
?
r
m
’
s
o
r
a
l
p
r
e
s
e
n
t
a
t
i
o
n
(
c
o
n
t
i
n
u
e
d
)
Table II.
ARJ
24,2
118
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
C
a
t
e
g
o
r
y
a
s
p
e
r
t
e
n
d
e
r
s
p
e
c
i
?
c
a
t
i
o
n
S
u
b
-
c
a
t
e
g
o
r
y
A
t
t
r
i
b
u
t
e
c
l
a
s
s
i
?
c
a
t
i
o
n
S
u
r
v
e
y
a
t
t
r
i
b
u
t
e
n
o
.
S
u
r
v
e
y
a
t
t
r
i
b
u
t
e
d
e
s
c
r
i
p
t
i
o
n
4
6
T
h
e
p
e
r
s
o
n
a
l
r
e
l
a
t
i
o
n
s
h
i
p
s
e
s
t
a
b
l
i
s
h
e
d
b
e
t
w
e
e
n
t
h
e
a
u
d
i
t
?
r
m
’
s
k
e
y
p
e
o
p
l
e
a
n
d
c
o
u
n
c
i
l
m
a
n
a
g
e
m
e
n
t
d
u
r
i
n
g
t
h
e
c
o
u
r
s
e
o
f
t
h
e
t
e
n
d
e
r
p
r
o
p
o
s
a
l
p
r
o
c
e
s
s
O
t
h
e
r
A
u
d
i
t
?
r
m
s
i
z
e
S
u
p
p
l
y
-
s
i
d
e
5
T
h
e
a
u
d
i
t
?
r
m
i
s
a
s
m
a
l
l
i
n
t
e
r
n
a
t
i
o
n
a
l
o
r
n
a
t
i
o
n
a
l
a
u
d
i
t
?
r
m
4
0
T
h
e
a
u
d
i
t
?
r
m
i
s
a
l
a
r
g
e
l
o
c
a
l
o
r
r
e
g
i
o
n
a
l
a
u
d
i
t
?
r
m
4
1
T
h
e
a
u
d
i
t
?
r
m
i
s
a
s
m
a
l
l
l
o
c
a
l
a
u
d
i
t
?
r
m
4
T
h
e
a
u
d
i
t
?
r
m
i
s
a
B
i
g
4
i
n
t
e
r
n
a
t
i
o
n
a
l
a
u
d
i
t
?
r
m
R
e
p
u
t
a
t
i
o
n
S
u
p
p
l
y
-
s
i
d
e
1
T
h
e
o
v
e
r
a
l
l
r
e
p
u
t
a
t
i
o
n
o
f
t
h
e
a
u
d
i
t
?
r
m
2
4
T
h
e
a
u
d
i
t
?
r
m
i
s
n
o
t
i
n
v
o
l
v
e
d
i
n
e
m
b
a
r
r
a
s
s
i
n
g
l
i
t
i
g
a
t
i
o
n
2
T
h
e
r
e
p
u
t
a
t
i
o
n
o
f
t
h
e
a
u
d
i
t
?
r
m
i
n
p
r
o
v
i
d
i
n
g
a
u
d
i
t
s
e
r
v
i
c
e
s
t
o
l
o
c
a
l
c
o
u
n
c
i
l
s
9
T
h
e
r
e
p
u
t
a
t
i
o
n
o
f
t
h
e
a
u
d
i
t
e
n
g
a
g
e
m
e
n
t
p
a
r
t
n
e
r
(
s
)
N
o
n
-
i
n
d
e
p
e
n
d
e
n
c
e
E
n
v
i
r
o
n
m
e
n
t
a
l
3
5
B
e
l
i
e
f
t
h
a
t
t
h
e
a
u
d
i
t
?
r
m
w
i
l
l
g
i
v
e
t
h
e
c
o
u
n
c
i
l
a
n
u
n
q
u
a
l
i
?
e
d
a
u
d
i
t
r
e
p
o
r
t
I
n
d
e
p
e
n
d
e
n
c
e
1
9
T
h
e
i
n
d
e
p
e
n
d
e
n
c
e
o
f
t
h
e
a
u
d
i
t
?
r
m
f
r
o
m
y
o
u
r
c
o
u
n
c
i
l
P
r
o
f
e
s
s
i
o
n
a
l
i
n
d
e
m
n
i
t
y
i
n
s
u
r
a
n
c
e
S
u
p
p
l
y
-
s
i
d
e
2
6
T
h
e
a
u
d
i
t
?
r
m
’
s
p
r
o
f
e
s
s
i
o
n
a
l
i
n
d
e
m
n
i
t
y
i
n
s
u
r
a
n
c
e
c
o
m
p
l
i
e
s
w
i
t
h
t
h
e
m
i
n
i
m
u
m
r
e
q
u
i
r
e
m
e
n
t
s
o
f
I
C
A
A
o
r
C
P
A
A
u
s
t
r
a
l
i
a
A
u
d
i
t
?
r
m
l
o
c
a
t
i
o
n
S
u
p
p
l
y
-
s
i
d
e
7
T
h
e
a
u
d
i
t
?
r
m
h
a
s
a
n
o
f
?
c
e
i
n
c
l
o
s
e
p
r
o
x
i
m
i
t
y
t
o
t
h
e
c
o
u
n
c
i
l
Table II.
Auditor
appointment
119
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
of whether the council would appoint a new audit ?rm or reappoint the incumbent.
Responses to this question formed the dependent variable.
Questionnaire design and administration followed Dillman’s (2000) tailored design
method. Three follow-ups to an initial mailing were conducted, two by mail and one by
phone. All councils were phoned prior to the third mail-out to ask if they had responded
to the survey[14], [15].
3.3 Sample selection and data collection
The sample was the population of 152 NSW local council ?nance managers. Finance
managers were the appropriate respondents because they are crucial members of the
tender committee that appoints the auditor, and they liaise closely with the external
auditors during the annual audit of the council’s ?nancial statements.
Appendix 1 shows the demographics of the sample. NSW councils are small in
population (70.7 percent have less than 50,000 residents) and revenue (66.7 percent have
revenue less than $50m), and are largely non-metropolitan (74.8 percent). They are
mostly audited by large local or regional ?rms (64 councils or 52 percent). A total of
79 (64.2 percent) have been audited by their incumbent for one tender period and
44 (35.8 percent) for two tender periods. Virtually all (93.5 percent) received unmodi?ed
opinions on their last audit report[16]. If tenders for audit services were called at the time
of the survey, the majority of councils would expect to receive between four and six bids
(73 councils or 59.3 percent). The demographic data also showed 27 (22 percent) of
councils would prefer to rotate their auditors and 96 (78 percent) would prefer to retain
their incumbent. Demographics for councils preferring to rotate and retain are shown in
columns 4 and 5, respectively. The demographics for each group essentially mirror those
for the total.
The data were collected in the middle of calendar year 2006, that is, towards the end
of the second compulsory tender and at the beginning of the last year of the six-year
mandatory tenure period (the tender period had commenced 1 July 2001 and was due to
end 30 June 2007). Council ?nance managers, as respondents, therefore had at least ?ve
years experience with their incumbent auditors.
3.4 Response rate
From the population of 152 ?nance managers, 148 (97 percent) responded.
In 25 responses one or more items of missing data were found and were deleted,
meaning all analyses were conducted on 123 responses. Aside from follow-up efforts,
the high response rate was achieved due to interest in the survey because of:
.
previous contact between the researchers and the ?nance managers as
participants at a national conference of local government ?nance professionals
shortly before the survey; and
.
the support of the survey by the NSW Local Government Finance Managers
Executive.
Given the highresponse rate, non-response bias is not a threat to the validityof the results.
3.5 Method of analysis
A forced con?rmatory factor analysis was conducted for each of the attribute
groupings level 1 (column 2 in Table I). Attribute groupings for location, ability
ARJ
24,2
120
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
to provide NAS and independence could not be factor analysed because they consisted
of only one item. The factor analysis was performed using the principal components
extraction method with Varimax (Kaiser normalisation) rotation. Each factor was
converted into a single factor score (following Field, 2000). The factor scores and means
for the single attributes of location, ability to provide NAS and independence were then
used in a logistic regression as predictor variables explaining intention to rotate or
retain the incumbent auditor.
Forced con?rmatory factor analysis was used as it provides factors coterminous
with the attribute grouping taxonomy developed from the literature, and allows testing
of the hypotheses. Con?rmatory factor analysis removes within-attribute collinearity,
although not between-attribute collinearity. Its purpose is to reduce predictor variables
to a subset of uncorrelated factors (Field, 2000, pp. 431-2).
3.6 Model speci?cation
The auditor choice model to be estimated is as follows (ignoring council and time
period subscripts):
Intention to rotate ¼ b
0
þ b
1
Audit firm reputation þ b
2
Location
þb
3
Ability to provide NAS
þb
4
Technical competence þ b
5
Audit plan
þb
6
Audit fee þ b
7
Independence
þb
8
Relationships with the incumbent audit firm
þb
9
Tender documents=process þ e
ð1Þ
where:
Intention to rotate ¼ categorical dependent variable, coded one for intention to
rotate, zero otherwise.
Independent variables ¼ continuous independent variables; factor scores
derived from factor analysing attributes comprising
the corresponding attribute category, or attribute mean
scores where the category contained a single attribute.
Single attribute categories are location, ability to
provide NAS and independence.
The demographic data (Appendix 1) were also included in the logistic regression as
controls. The only control that was signi?cant was the number of bids, indicating the
competitiveness of the market. As no other control was signi?cant, the model does not
specify the controls and none of the results for the controls are reported.
We used intention or preference to rotate or retain auditors as the dependent variable.
Adichotomous measure was used to re?ect the nature of the decision. The demand-side
studies also use this dichotomy (Woo and Koh, 2001). Ameasure of preferred outcome or
intention follows Pandit (1999), and is based on research that shows intention follows
attitude and precedes behaviour; and is a commonly used approach in the behavioural
literatures to measure the likelihood of action (Pandit, 1999, p. 176).
The questionnaires were anonymous so we have no ability to match intention at
the time of the survey with behaviour at the next tender (which took place 12 months after
the study). However, at the subsequent tender 14 percent of councils rotated their auditors
Auditor
appointment
121
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
and86 percent retainedtheir incumbents. These percentages are relativelyconsistent with
the percentages of intending rotators (22 percent) and retainers (78 percent) in our study.
3.7 Sensitivity analysis
A forced con?rmatory factor analysis was conducted for each of the nine categories in
the sample tender speci?cation set out in Table II, to identify a single factor for each
category. principal components extraction method with Varimax (Kaiser
normalisation) rotation was used. Each factor was converted into a single factor
score (Field, 2000). These (uncorrelated) factor scores were then used in a logistic
regression as predictor variables explaining intention to rotate or retain the incumbent
auditor, hence facilitating tests of the hypothesis and allowing examination of the
usefulness of the sample tender speci?cation.
The auditor choice model to be estimated is as follows (ignoring council and time
period subscripts):
Intention to rotate ¼b
0
þb
1
Capacity
2including quality and availability of workforce
þb
2
Quality and depth of audit performance and experience
þb
3
Proposed audit plan þb
4
Price
þb
5
Value–added services þb
6
Technical expertise
þb
7
Referees þb
8
Tender proposal process
þb
9
Other þe
ð2Þ
where:
Intention to rotate ¼ categorical dependent variable, coded one for intention to
rotate, zero otherwise.
Independent variables ¼ continuous independent variables; factor scores derived
from factor analysing attributes comprising the
corresponding attribute category.
Consistent with the main results, the demographic data were included in the logistic
regression as controls. Again, no control was signi?cant other than the number of bids.
Therefore, the model does not specify controls and none of the results for controls are
reported.
4. Results
4.1 Descriptives
Appendix 2 presents the importance ratings (means, medians and standard deviations)
for the 48 individual attributes on a scale of minus three (very unimportant) to plus
three (very important). Column 3 shows the importance ratings for the total sample.
Columns 4 and 5 show the ratings for the councils preferring to rotate and retain their
incumbent auditor, respectively. The attributes are ranked in descending order of
importance for the total sample, i.e. the most important attribute is listed ?rst.
The three most important attributes overall (for the total sample) relate to the
councils’ relationship with their incumbent auditors and are associated with the quality
of performance of the audit ?rm and/or staff. These are:
ARJ
24,2
122
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
(1) the overall quality of audit services provided by the audit ?rm;
(2) the quality of the audit ?rm’s advice to council management, including
management letters and internal control reports; and
(3) the ability of the audit partner(s) to meet deadlines.
The next three items in order of importance are reputation (both in providing audit
services to local councils and overall) and independence. Three of the four items
comprising the remainder of a “Top 10” relate to technical expertise and depth of
experience of the audit team; speci?cally experience of the audit manager(s) and
partner(s) in conducting local government audits and audits generally. One audit fee
attribute (the fee is commensurate with the audit work required) was ranked ninth.
However, the other fee attribute (the competitiveness of the pricing structure of the
audit ?rm) was ranked 23rd and below other quality related attributes.
The four attributes considered least important were all associated with audit ?rm
size and type; speci?cally:
(1) the audit ?rm is a Big 4 international audit ?rm;
(2) the audit ?rm is a small international or national audit ?rm;
(3) the audit ?rm is a small local ?rm; and
(4) the audit ?rm is a large local or regional audit ?rm[17].
Also rated in the ten least important attributes were the belief that the audit ?rm will
give the council an unquali?ed audit report, the audit ?rm has an of?ce in close
proximity to the council, details of major audit clients of the audit ?rm, and the
capability of the audit ?rm to provide non-audit services.
These ?ndings provide descriptive evidence that, in the context of compulsory audit
tendering, quality considerations are important in auditor appointment decisions.
Local councils value the importance of, and are likely to appoint, audit ?rms that are
reputable, independent, have audit teams with technical competence, particularly local
council industry expertise, and provide quality audit services in their relationships
with the council. Given the predominance of retainers in the sample, these ?ndings
support the premise that satisfaction with the quality of the incumbent auditor is
associated with retention of the incumbent.
4.2 Univariate results
Column 6 in Appendix 2 shows t-statistics and signi?cance levels for tests of
differences of attribute means between councils preferring to rotate their incumbent
auditor (rotators) and councils preferring to retain (retainers). Of the 48 attributes,
17 were positive and signi?cant (six at p , 0.01 and 11 at p , 0.05) and four were
positive and marginally signi?cant ( p , 0.10), meaning they were more important to
rotators. One attribute (the council’s previous experience with the incumbent auditor)
had a negative sign (signi?cant at p , 0.05), meaning it was more important to
retainers. The descriptive statistics suggest that respondents intending to rotate are
more highly sensitised to the importance of audit quality attributes overall compared
to those intending to retain.
Table III presents the results of the con?rmatory factor analysis conducted
on the nine attributes (attribute groupings level 1) in column 2 of Table I.
Auditor
appointment
123
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
A
t
t
r
i
b
u
t
e
n
o
.
A
t
t
r
i
b
u
t
e
d
e
s
c
r
i
p
t
i
o
n
A
u
d
i
t
?
r
m
r
e
p
u
t
a
t
i
o
n
(
1
0
0
p
e
r
c
e
n
t
)
4
8
R
e
f
e
r
e
n
c
e
s
f
r
o
m
m
a
j
o
r
a
u
d
i
t
c
l
i
e
n
t
s
o
f
t
h
e
a
u
d
i
t
?
r
m
(
0
.
1
7
0
)
4
7
D
e
t
a
i
l
s
o
f
m
a
j
o
r
a
u
d
i
t
c
l
i
e
n
t
s
o
f
t
h
e
a
u
d
i
t
?
r
m
(
0
.
1
6
1
)
5
T
h
e
a
u
d
i
t
?
r
m
i
s
a
s
m
a
l
l
i
n
t
e
r
n
a
t
i
o
n
a
l
o
r
n
a
t
i
o
n
a
l
a
u
d
i
t
?
r
m
(
0
.
1
5
5
)
4
5
R
e
f
e
r
e
n
c
e
s
f
r
o
m
s
e
n
i
o
r
N
S
W
l
o
c
a
l
c
o
u
n
c
i
l
r
e
p
r
e
s
e
n
t
a
t
i
v
e
s
t
h
a
t
h
a
v
e
e
x
p
e
r
i
e
n
c
e
w
i
t
h
t
h
e
a
u
d
i
t
?
r
m
(
0
.
1
4
7
)
9
T
h
e
r
e
p
u
t
a
t
i
o
n
o
f
t
h
e
a
u
d
i
t
e
n
g
a
g
e
m
e
n
t
p
a
r
t
n
e
r
(
s
)
(
0
.
1
4
6
)
4
1
T
h
e
a
u
d
i
t
?
r
m
i
s
a
s
m
a
l
l
l
o
c
a
l
a
u
d
i
t
?
r
m
(
0
.
1
4
3
)
4
T
h
e
a
u
d
i
t
?
r
m
i
s
a
B
i
g
4
i
n
t
e
r
n
a
t
i
o
n
a
l
a
u
d
i
t
?
r
m
(
0
.
1
4
1
)
4
0
T
h
e
a
u
d
i
t
?
r
m
i
s
a
l
a
r
g
e
l
o
c
a
l
o
r
r
e
g
i
o
n
a
l
a
u
d
i
t
?
r
m
(
0
.
1
3
9
)
2
4
T
h
e
a
u
d
i
t
?
r
m
i
s
n
o
t
i
n
v
o
l
v
e
d
i
n
e
m
b
a
r
r
a
s
s
i
n
g
l
i
t
i
g
a
t
i
o
n
(
0
.
1
3
3
)
1
T
h
e
o
v
e
r
a
l
l
r
e
p
u
t
a
t
i
o
n
o
f
t
h
e
a
u
d
i
t
?
r
m
(
0
.
1
2
0
)
3
5
B
e
l
i
e
f
t
h
a
t
t
h
e
a
u
d
i
t
?
r
m
w
i
l
l
g
i
v
e
t
h
e
c
o
u
n
c
i
l
a
n
u
n
q
u
a
l
i
?
e
d
a
u
d
i
t
r
e
p
o
r
t
(
0
.
1
1
5
)
2
5
T
h
e
a
u
d
i
t
?
r
m
i
s
a
c
c
e
p
t
a
b
l
e
t
o
t
h
e
c
o
u
n
c
i
l
’
s
r
e
g
u
l
a
t
o
r
s
(
0
.
0
9
6
)
2
T
h
e
r
e
p
u
t
a
t
i
o
n
o
f
t
h
e
a
u
d
i
t
?
r
m
i
n
p
r
o
v
i
d
i
n
g
a
u
d
i
t
s
e
r
v
i
c
e
s
t
o
l
o
c
a
l
c
o
u
n
c
i
l
s
(
0
.
0
7
9
)
2
6
T
h
e
a
u
d
i
t
?
r
m
’
s
p
r
o
f
e
s
s
i
o
n
a
l
i
n
d
e
m
n
i
t
y
i
n
s
u
r
a
n
c
e
c
o
m
p
l
i
e
s
w
i
t
h
t
h
e
m
i
n
i
m
u
m
r
e
q
u
i
r
e
m
e
n
t
s
o
f
I
C
A
A
o
r
C
P
A
A
u
s
t
r
a
l
i
a
(
0
.
0
7
1
)
K
a
i
s
e
r
-
M
e
y
e
r
-
O
l
k
i
n
m
e
a
s
u
r
e
o
f
s
a
m
p
l
i
n
g
a
d
e
q
u
a
c
y
¼
0
.
7
0
4
B
a
r
t
l
e
t
t
’
s
t
e
s
t
o
f
s
p
h
e
r
i
c
i
t
y
:
a
p
p
r
o
x
.
x
2
6
0
9
.
0
4
2
,
(
s
i
g
.
)
¼
(
0
.
0
0
0
)
T
e
c
h
n
i
c
a
l
c
o
m
p
e
t
e
n
c
e
(
1
0
0
p
e
r
c
e
n
t
)
3
2
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
a
u
d
i
t
t
e
a
m
s
u
p
e
r
v
i
s
o
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
a
u
d
i
t
s
g
e
n
e
r
a
l
l
y
(
0
.
1
5
5
)
3
3
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
a
u
d
i
t
t
e
a
m
s
u
p
e
r
v
i
s
o
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
l
o
c
a
l
g
o
v
e
r
n
m
e
n
t
a
u
d
i
t
s
(
0
.
1
5
5
)
1
2
T
h
e
t
e
c
h
n
i
c
a
l
q
u
a
l
i
?
c
a
t
i
o
n
s
o
f
t
h
e
a
u
d
i
t
t
e
a
m
s
u
p
e
r
v
i
s
o
r
(
s
)
(
0
.
1
5
3
)
1
1
T
h
e
t
e
c
h
n
i
c
a
l
q
u
a
l
i
?
c
a
t
i
o
n
s
o
f
t
h
e
a
u
d
i
t
t
e
a
m
m
a
n
a
g
e
r
(
s
)
(
0
.
1
4
5
)
2
9
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
a
u
d
i
t
m
a
n
a
g
e
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
a
u
d
i
t
s
g
e
n
e
r
a
l
l
y
(
0
.
1
4
4
)
3
0
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
a
u
d
i
t
m
a
n
a
g
e
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
l
o
c
a
l
g
o
v
e
r
n
m
e
n
t
a
u
d
i
t
s
(
0
.
1
4
1
)
1
0
T
h
e
t
e
c
h
n
i
c
a
l
q
u
a
l
i
?
c
a
t
i
o
n
s
o
f
t
h
e
a
u
d
i
t
e
n
g
a
g
e
m
e
n
t
p
a
r
t
n
e
r
(
s
)
(
0
.
1
3
4
)
2
0
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
a
u
d
i
t
e
n
g
a
g
e
m
e
n
t
p
a
r
t
n
e
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
a
u
d
i
t
s
g
e
n
e
r
a
l
l
y
(
0
.
1
2
0
)
2
1
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
a
u
d
i
t
e
n
g
a
g
e
m
e
n
t
p
a
r
t
n
e
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
l
o
c
a
l
g
o
v
e
r
n
m
e
n
t
a
u
d
i
t
s
(
0
.
1
1
4
)
6
T
h
e
a
u
d
i
t
?
r
m
i
s
c
o
n
s
i
d
e
r
e
d
t
o
b
e
a
s
p
e
c
i
a
l
i
s
t
i
n
l
o
c
a
l
g
o
v
e
r
n
m
e
n
t
a
u
d
i
t
(
0
.
1
0
2
)
4
4
D
e
t
a
i
l
s
o
f
o
t
h
e
r
c
o
u
n
c
i
l
s
c
u
r
r
e
n
t
l
y
a
u
d
i
t
e
d
b
y
t
h
e
a
u
d
i
t
?
r
m
(
0
.
0
6
6
)
K
a
i
s
e
r
-
M
e
y
e
r
-
O
l
k
i
n
m
e
a
s
u
r
e
o
f
s
a
m
p
l
i
n
g
a
d
e
q
u
a
c
y
¼
0
.
7
8
0
B
a
r
t
l
e
t
t
’
s
t
e
s
t
o
f
s
p
h
e
r
i
c
i
t
y
:
a
p
p
r
o
x
.
x
2
9
7
9
.
7
9
0
,
(
s
i
g
.
)
¼
(
0
.
0
0
0
)
A
u
d
i
t
p
l
a
n
(
1
0
0
p
e
r
c
e
n
t
)
3
1
T
h
e
p
r
o
p
o
s
e
d
i
n
v
o
l
v
e
m
e
n
t
o
f
t
h
e
a
u
d
i
t
m
a
n
a
g
e
r
(
s
)
i
n
t
h
e
c
o
n
d
u
c
t
o
f
t
h
e
a
u
d
i
t
i
n
t
e
r
m
s
o
f
e
s
t
i
m
a
t
e
d
a
u
d
i
t
h
o
u
r
s
(
0
.
2
0
0
)
3
4
T
h
e
p
r
o
p
o
s
e
d
i
n
v
o
l
v
e
m
e
n
t
o
f
t
h
e
a
u
d
i
t
t
e
a
m
s
u
p
e
r
v
i
s
o
r
(
s
)
i
n
t
h
e
c
o
n
d
u
c
t
o
f
t
h
e
a
u
d
i
t
i
n
t
e
r
m
s
o
f
e
s
t
i
m
a
t
e
d
a
u
d
i
t
h
o
u
r
s
(
0
.
1
9
2
)
1
4
T
h
e
n
a
t
u
r
e
o
f
t
h
e
p
r
o
p
o
s
e
d
a
u
d
i
t
a
p
p
r
o
a
c
h
(
0
.
1
8
2
)
(
c
o
n
t
i
n
u
e
d
)
Table III.
Con?rmatory factor
analysis
ARJ
24,2
124
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
A
t
t
r
i
b
u
t
e
n
o
.
A
t
t
r
i
b
u
t
e
d
e
s
c
r
i
p
t
i
o
n
2
2
T
h
e
p
r
o
p
o
s
e
d
i
n
v
o
l
v
e
m
e
n
t
o
f
t
h
e
a
u
d
i
t
p
a
r
t
n
e
r
(
s
)
i
n
t
h
e
c
o
n
d
u
c
t
o
f
t
h
e
a
u
d
i
t
i
n
t
e
r
m
s
o
f
e
s
t
i
m
a
t
e
d
a
u
d
i
t
h
o
u
r
s
(
0
.
1
7
8
)
1
3
T
h
e
d
e
t
a
i
l
a
n
d
c
o
m
p
l
e
t
e
n
e
s
s
o
f
t
h
e
p
r
o
p
o
s
e
d
a
u
d
i
t
p
l
a
n
(
0
.
1
7
4
)
1
5
T
h
e
p
r
o
p
o
s
e
d
n
u
m
b
e
r
o
f
h
o
u
r
s
t
o
c
o
n
d
u
c
t
t
h
e
a
u
d
i
t
(
f
r
o
m
t
h
e
b
e
g
i
n
n
i
n
g
o
f
?
e
l
d
w
o
r
k
t
o
t
h
e
a
u
d
i
t
r
e
p
o
r
t
d
a
t
e
)
(
0
.
1
7
2
)
2
3
T
h
e
c
o
m
p
u
t
e
r
a
u
d
i
t
c
a
p
a
b
i
l
i
t
y
o
f
t
h
e
a
u
d
i
t
?
r
m
(
0
.
1
6
0
)
1
6
T
h
e
p
r
o
p
o
s
e
d
t
i
m
i
n
g
o
f
a
u
d
i
t
w
o
r
k
i
n
t
e
r
m
s
o
f
t
h
e
n
u
m
b
e
r
,
d
u
r
a
t
i
o
n
a
n
d
a
p
p
r
o
x
i
m
a
t
e
d
a
t
e
o
f
v
i
s
i
t
s
b
y
t
h
e
a
u
d
i
t
?
r
m
(
0
.
1
4
1
)
K
a
i
s
e
r
-
M
e
y
e
r
-
O
l
k
i
n
m
e
a
s
u
r
e
o
f
s
a
m
p
l
i
n
g
a
d
e
q
u
a
c
y
¼
0
.
8
2
2
B
a
r
t
l
e
t
t
’
s
t
e
s
t
o
f
s
p
h
e
r
i
c
i
t
y
:
a
p
p
r
o
x
.
x
2
3
9
5
.
2
2
4
,
(
s
i
g
.
)
¼
(
0
.
0
0
0
)
A
u
d
i
t
f
e
e
(
1
0
0
p
e
r
c
e
n
t
)
1
7
T
h
e
c
o
m
p
e
t
i
t
i
v
e
n
e
s
s
o
f
t
h
e
p
r
i
c
i
n
g
s
t
r
u
c
t
u
r
e
o
f
t
h
e
a
u
d
i
t
?
r
m
f
o
r
t
h
e
p
r
o
v
i
s
i
o
n
o
f
a
u
d
i
t
s
e
r
v
i
c
e
s
(
0
.
5
8
3
)
1
8
T
h
e
a
u
d
i
t
f
e
e
e
s
t
i
m
a
t
e
p
r
o
v
i
d
e
d
b
y
t
h
e
a
u
d
i
t
?
r
m
i
s
c
o
m
m
e
n
s
u
r
a
t
e
w
i
t
h
t
h
e
a
u
d
i
t
w
o
r
k
r
e
q
u
i
r
e
d
(
0
.
5
8
3
)
K
a
i
s
e
r
-
M
e
y
e
r
-
O
l
k
i
n
m
e
a
s
u
r
e
o
f
s
a
m
p
l
i
n
g
a
d
e
q
u
a
c
y
¼
0
.
5
0
0
B
a
r
t
l
e
t
t
’
s
t
e
s
t
o
f
s
p
h
e
r
i
c
i
t
y
:
a
p
p
r
o
x
.
x
2
3
0
.
1
5
9
,
(
s
i
g
.
)
¼
(
0
.
0
0
0
)
R
e
l
a
t
i
o
n
s
h
i
p
s
w
i
t
h
t
h
e
i
n
c
u
m
b
e
n
t
a
u
d
i
t
o
r
(
1
0
0
p
e
r
c
e
n
t
)
2
8
Q
u
a
l
i
t
y
o
f
w
o
r
k
i
n
g
r
e
l
a
t
i
o
n
s
h
i
p
s
w
i
t
h
t
h
e
a
u
d
i
t
e
n
g
a
g
e
m
e
n
t
s
t
a
f
f
(
0
.
2
4
5
)
2
7
Q
u
a
l
i
t
y
o
f
w
o
r
k
i
n
g
r
e
l
a
t
i
o
n
s
h
i
p
w
i
t
h
t
h
e
a
u
d
i
t
p
a
r
t
n
e
r
(
s
)
(
0
.
2
4
2
)
3
7
T
h
e
a
b
i
l
i
t
y
o
f
t
h
e
a
u
d
i
t
p
a
r
t
n
e
r
(
s
)
t
o
m
e
e
t
d
e
a
d
l
i
n
e
s
(
0
.
2
3
1
)
3
6
T
h
e
a
c
c
e
s
s
i
b
i
l
i
t
y
o
f
t
h
e
p
a
r
t
n
e
r
(
s
)
-
i
n
-
c
h
a
r
g
e
o
f
t
h
e
e
n
g
a
g
e
m
e
n
t
(
0
.
2
2
1
)
3
8
T
h
e
o
v
e
r
a
l
l
q
u
a
l
i
t
y
o
f
a
u
d
i
t
s
e
r
v
i
c
e
s
p
r
o
v
i
d
e
d
b
y
t
h
e
a
u
d
i
t
?
r
m
(
0
.
2
1
3
)
3
9
T
h
e
q
u
a
l
i
t
y
o
f
t
h
e
a
u
d
i
t
?
r
m
’
s
a
d
v
i
c
e
t
o
c
o
u
n
c
i
l
m
a
n
a
g
e
m
e
n
t
,
i
n
c
l
u
d
i
n
g
m
a
n
a
g
e
m
e
n
t
l
e
t
t
e
r
s
,
i
n
t
e
r
n
a
l
c
o
n
t
r
o
l
r
e
p
o
r
t
s
(
0
.
1
8
5
)
8
P
r
e
v
i
o
u
s
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
a
u
d
i
t
?
r
m
w
i
t
h
y
o
u
r
c
o
u
n
c
i
l
a
s
a
n
i
n
c
u
m
b
e
n
t
a
u
d
i
t
o
r
(
0
.
1
5
0
)
K
a
i
s
e
r
-
M
e
y
e
r
-
O
l
k
i
n
m
e
a
s
u
r
e
o
f
s
a
m
p
l
i
n
g
a
d
e
q
u
a
c
y
¼
0
.
7
2
9
B
a
r
t
l
e
t
t
’
s
t
e
s
t
o
f
s
p
h
e
r
i
c
i
t
y
:
a
p
p
r
o
x
.
x
2
2
9
1
.
2
7
6
,
(
s
i
g
.
)
¼
(
0
.
0
0
0
)
T
e
n
d
e
r
d
o
c
u
m
e
n
t
s
/
p
r
o
c
e
s
s
(
1
0
0
p
e
r
c
e
n
t
)
4
2
T
h
e
q
u
a
l
i
t
y
o
f
t
h
e
a
u
d
i
t
?
r
m
’
s
w
r
i
t
t
e
n
t
e
n
d
e
r
p
r
o
p
o
s
a
l
(
0
.
4
7
5
)
4
6
T
h
e
p
e
r
s
o
n
a
l
r
e
l
a
t
i
o
n
s
h
i
p
s
e
s
t
a
b
l
i
s
h
e
d
b
e
t
w
e
e
n
t
h
e
a
u
d
i
t
?
r
m
’
s
k
e
y
p
e
o
p
l
e
a
n
d
c
o
u
n
c
i
l
m
a
n
a
g
e
m
e
n
t
d
u
r
i
n
g
t
h
e
c
o
u
r
s
e
o
f
t
h
e
t
e
n
d
e
r
p
r
o
p
o
s
a
l
p
r
o
c
e
s
s
(
0
.
4
5
7
)
4
3
T
h
e
q
u
a
l
i
t
y
o
f
t
h
e
a
u
d
i
t
?
r
m
’
s
o
r
a
l
p
r
e
s
e
n
t
a
t
i
o
n
(
0
.
3
3
5
)
K
a
i
s
e
r
-
M
e
y
e
r
-
O
l
k
i
n
m
e
a
s
u
r
e
o
f
s
a
m
p
l
i
n
g
a
d
e
q
u
a
c
y
¼
0
.
5
8
5
B
a
r
t
l
e
t
t
’
s
t
e
s
t
o
f
s
p
h
e
r
i
c
i
t
y
:
a
p
p
r
o
x
.
x
2
7
2
.
6
8
5
,
(
s
i
g
.
)
¼
(
0
.
0
0
0
)
N
o
t
e
s
:
E
a
c
h
o
f
t
h
e
a
t
t
r
i
b
u
t
e
s
c
o
m
p
r
i
s
i
n
g
t
h
e
c
a
t
e
g
o
r
i
e
s
r
e
p
o
r
t
e
d
i
n
T
a
b
l
e
I
,
c
o
l
u
m
n
2
,
w
e
r
e
f
o
r
c
e
d
i
n
t
o
o
n
e
f
a
c
t
o
r
;
t
h
e
e
x
t
r
a
c
t
i
o
n
m
e
t
h
o
d
i
s
p
r
i
n
c
i
p
a
l
c
o
m
p
o
n
e
n
t
s
a
n
a
l
y
s
i
s
;
t
h
e
o
r
t
h
o
g
o
n
a
l
r
o
t
a
t
i
o
n
m
e
t
h
o
d
u
s
e
d
i
s
V
a
r
i
m
a
x
w
i
t
h
K
a
i
s
e
r
n
o
r
m
a
l
i
s
a
t
i
o
n
;
t
h
e
n
u
m
b
e
r
s
i
n
p
a
r
e
n
t
h
e
s
e
s
a
f
t
e
r
t
h
e
a
t
t
r
i
b
u
t
e
d
e
s
c
r
i
p
t
i
o
n
s
a
r
e
t
h
e
f
a
c
t
o
r
l
o
a
d
i
n
g
s
f
r
o
m
t
h
e
p
o
o
l
e
d
f
a
c
t
o
r
a
n
a
l
y
s
i
s
;
t
h
e
a
t
t
r
i
b
u
t
e
s
l
o
c
a
t
i
o
n
,
a
b
i
l
i
t
y
t
o
p
r
o
v
i
d
e
N
A
S
a
n
d
i
n
d
e
p
e
n
d
e
n
c
e
w
e
r
e
u
n
a
b
l
e
t
o
b
e
f
a
c
t
o
r
a
n
a
l
y
s
e
d
b
e
c
a
u
s
e
t
h
e
y
w
e
r
e
s
i
n
g
l
e
a
t
t
r
i
b
u
t
e
s
Table III.
Auditor
appointment
125
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
The attributes location, ability to provide NAS and independence were unable to be
factor analysed because they were single attributes.
Table IV presents the Spearman correlations among the dependent variable,
Intention to rotate and the independent variables (based on means for the three
single-item factors and factor scores for the other six factors). Table IV shows
signi?cant correlations between intention to rotate and audit ?rm reputation
( r ¼ 0.320), technical competence (r ¼ 0.314) and independence (r ¼ 0.192). These
results provide initial support for the hypothesis that councils intending to rotate are
seeking a quality auditor with the characteristics of reputation, technical competence
and independence. There were no high correlations among the independent variables,
suggesting multicollinearity does not affect the results.
Table V presents the results of independent t-tests of differences in the relative
importance of the nine theoretically derived attribute groupings (six factor scores and
three attributes) between rotators and retainers. Table V shows that the t-statistics
(one-tailed) for audit ?rm reputation (t ¼ 3.256, p , 0.000), technical competence
(t ¼ 3.437, p , 0.000), audit plan (t ¼ 2.154, p , 0.017) and independence (t ¼ 2.031,
p , 0.022) are positive and signi?cant, indicating that they were considered more
important by rotators than retainers in their auditor appointment decisions.
4.3 Multivariate results
To test the hypothesis, the sixfactor scores and three individual attributes were included
in a logistic regression model explaining audit ?rm rotation/retention. The results
are presented in Table VI. Table VI shows that the model is signi?cant overall
(x
2
statistic ¼ 18.929, prob. , 0.000) and the Nagelkerke R
2
is 21.9 percent. The
coef?cients for audit ?rm reputation (Wald ¼ 1.955, p , 0.081), technical competence
(Wald ¼ 3.921, p , 0.024) andindependence (Wald ¼ 1.624, p , 0.101) are positive and
signi?cant (one-tailed), indicating that these factors/attributes are considered more
important by rotators than retainers when making auditor appointment decisions.
Expressed another way, the signi?cant positive coef?cients mean that the higher the
importance rating attached to these factors/attributes, the greater the likelihood of
rotation to a new auditor perceived to possess these attributes[18].
The results provide support for the hypothesis that councils predisposed to rotate
auditors because of dissatisfaction with the quality of their incumbent auditor are
rotating towards a quality auditor where a quality auditor is proxied by technical
competence independence and reputation.
4.4 Sensitivity results
Table VII presents the results of the forced con?rmatory factor analysis conducted on
the nine categories of the sample tender speci?cation provided to assist councils in
auditor appointment decisions (shown in column 1 of Table II). The nine factors
extracted were converted to factor scores and univariate and multivariate analyses
were conducted to ascertain whether there were differences between potential rotators
and retainers in the importance of attributes in auditor appointment decisions.
4.4.1 Univariate results. Table VIII presents the Spearman correlations among the
dependent variable, Intention to rotate and the independent variables. There were no
high correlations among the independent variables, suggesting multicollinearity does
not affect the results.
ARJ
24,2
126
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
I
n
t
e
n
t
i
o
n
t
o
r
o
t
a
t
e
A
u
d
i
t
?
r
m
r
e
p
u
t
a
t
i
o
n
L
o
c
a
t
i
o
n
A
b
i
l
i
t
y
t
o
p
r
o
v
i
d
e
N
A
S
T
e
c
h
n
i
c
a
l
c
o
m
p
e
t
e
n
c
e
A
u
d
i
t
p
l
a
n
A
u
d
i
t
f
e
e
I
n
d
e
p
e
n
d
e
n
c
e
R
e
l
a
t
i
o
n
s
h
i
p
s
w
i
t
h
t
h
e
i
n
c
u
m
b
e
n
t
a
u
d
i
t
?
r
m
T
e
n
d
e
r
d
o
c
u
m
e
n
t
s
/
p
r
o
c
e
s
s
I
n
t
e
n
t
i
o
n
t
o
r
o
t
a
t
e
1
.
0
0
0
A
u
d
i
t
?
r
m
r
e
p
u
t
a
t
i
o
n
0
.
3
2
0
*
*
1
.
0
0
0
L
o
c
a
t
i
o
n
2
0
.
0
9
1
0
.
0
8
5
1
.
0
0
0
A
b
i
l
i
t
y
t
o
p
r
o
v
i
d
e
N
A
S
0
.
0
4
8
0
.
2
7
5
*
*
0
.
0
4
3
1
.
0
0
0
T
e
c
h
n
i
c
a
l
c
o
m
p
e
t
e
n
c
e
0
.
3
1
4
*
*
0
.
5
6
6
*
*
0
.
0
5
4
0
.
3
0
8
*
1
.
0
0
0
A
u
d
i
t
p
l
a
n
0
.
1
9
1
*
0
.
5
5
8
*
0
.
0
6
4
0
.
4
2
8
*
*
0
.
6
2
4
*
*
1
.
0
0
0
A
u
d
i
t
f
e
e
0
.
1
1
4
0
.
3
1
6
*
*
2
0
.
0
3
5
0
.
1
3
4
0
.
4
0
4
*
*
0
.
4
8
4
*
*
1
.
0
0
0
I
n
d
e
p
e
n
d
e
n
c
e
0
.
1
9
2
*
0
.
2
8
8
*
*
2
0
.
1
0
9
0
.
1
8
5
*
0
.
3
1
2
*
*
0
.
3
6
2
*
*
0
.
2
0
2
*
1
.
0
0
0
R
e
l
a
t
i
o
n
s
h
i
p
s
w
i
t
h
t
h
e
i
n
c
u
m
b
e
n
t
a
u
d
i
t
?
r
m
0
.
1
4
1
0
.
4
8
5
*
*
0
.
1
1
6
0
.
3
5
5
*
*
0
.
6
4
2
*
*
0
.
6
3
6
*
*
.
5
2
0
*
*
0
.
2
7
1
*
*
1
.
0
0
0
T
e
n
d
e
r
d
o
c
u
m
e
n
t
s
/
p
r
o
c
e
s
s
0
.
1
3
7
0
.
5
3
4
*
*
0
.
0
3
0
0
.
2
8
9
*
*
0
.
3
3
0
*
*
0
.
3
7
8
*
*
0
.
4
1
4
*
*
0
.
1
6
3
0
.
2
9
2
*
*
1
.
0
0
0
N
o
t
e
s
:
C
o
r
r
e
l
a
t
i
o
n
i
s
s
i
g
n
i
?
c
a
n
t
a
t
t
h
e
*
0
.
0
5
a
n
d
*
*
0
.
0
1
l
e
v
e
l
s
;
n
¼
1
2
3
;
w
h
e
r
e
:
i
n
t
e
n
t
i
o
n
t
o
r
o
t
a
t
e
–
c
a
t
e
g
o
r
i
c
a
l
d
e
p
e
n
d
e
n
t
v
a
r
i
a
b
l
e
,
c
o
d
e
d
o
n
e
f
o
r
i
n
t
e
n
t
i
o
n
t
o
r
o
t
a
t
e
,
z
e
r
o
o
t
h
e
r
w
i
s
e
;
i
n
d
e
p
e
n
d
e
n
t
v
a
r
i
a
b
l
e
s
–
c
o
n
t
i
n
u
o
u
s
i
n
d
e
p
e
n
d
e
n
t
v
a
r
i
a
b
l
e
s
,
f
a
c
t
o
r
s
c
o
r
e
s
d
e
r
i
v
e
d
f
r
o
m
f
a
c
t
o
r
a
n
a
l
y
s
i
n
g
a
t
t
r
i
b
u
t
e
s
c
o
m
p
r
i
s
i
n
g
t
h
e
c
o
r
r
e
s
p
o
n
d
i
n
g
a
t
t
r
i
b
u
t
e
c
a
t
e
g
o
r
y
,
o
r
a
t
t
r
i
b
u
t
e
m
e
a
n
s
c
o
r
e
s
w
h
e
r
e
t
h
e
c
a
t
e
g
o
r
y
c
o
n
t
a
i
n
e
d
a
s
i
n
g
l
e
a
t
t
r
i
b
u
t
e
;
s
i
n
g
l
e
a
t
t
r
i
b
u
t
e
c
a
t
e
g
o
r
i
e
s
a
r
e
l
o
c
a
t
i
o
n
,
a
b
i
l
i
t
y
t
o
p
r
o
v
i
d
e
N
A
S
,
a
n
d
i
n
d
e
p
e
n
d
e
n
c
e
Table IV.
Spearman correlations
among dependent
variable intention to
rotate and independent
variables
Auditor
appointment
127
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
Table VIII shows signi?cant and positive correlations between intention to rotate and
capacity-including quality and availability of workforce (r ¼ 0.235), quality and depth
of audit performance and experience (r ¼ 0.221), proposed audit plan (r ¼ 0.190),
technical expertise (r ¼ 0.310), referees (r ¼ 0.182) and other (r ¼ 0.346). These results
lend initial support to the hypothesis that councils intending to rotate are seeking a
quality auditor: particularly in terms of the categories: capacity which includes technical
quali?cations; quality and depth of audit performance and experience which includes
audit experience and the quality of services provided to the council; and technical
expertise which includes experience in conducting local government audits. Rotators are
also placing greater importance on the proposed audit plan and referees than retainers.
The signi?cance of the category other indicates that rotators place greater importance
on audit quality attributes not included speci?cally in the sample tender speci?cation.
Table IX presents the results of independent t-tests of differences in the relative
importance of the nine categories betweenrotators andretainers. The t-statistics (one-tailed)
for capacity-including quality and availability of workforce (t ¼ 2.401, p , 0.018), quality
and depth of audit performance and experience (t ¼ 2.503, p , 0.014), proposed audit plan
(t ¼ 2.231, p , 0.028), technical expertise (t ¼ 3.261, p , 0.001) and other (t ¼ 3.455,
p , 0.001) are positive and signi?cant, indicating that they were considered more
important by rotators than retainers in their auditor appointment decisions.
4.4.2 Multivariate results. The factor scores for the nine categories were included in a
logistic regression model explaining audit ?rmrotation/retention, providing a second test
of the hypotheses using the speci?cation categories. The results are presented in Table X.
Mean value of factor scores
a
Test results
Factor score/attribute
a
Potential rotators
(n ¼ 27)
Potential retainers
(n ¼ 96) t-statistic
Signi?cance
(one-tailed)
b
Audit ?rm reputation 0.5329473 20.1498914 3.256 0.000
* * *
Location 0.52 0.67 20.425 0.336
Ability to provide NAS 1.52 1.41 0.418 0.339
Technical competence 0.5600990 20.1575278 3.437 0.000
* * *
Audit plan 0.3608258 20.1014823 2.154 0.017
* *
Audit fee 0.2052785 20.0577346 1.210 0.115
Independence 2.74 2.36 2.031 0.022
* *
Relationships with the
incumbent audit ?rm
0.2759666 20.0776156 1.634 0.053
Tender documents/process 0.2794105 20.0785842 1.655 0.051
Notes: Signi?cant at the
*
10,
* *
5, and
* * *
1 percent levels (one-tailed);
a
each of the attributes
comprising the categories reported in Table I, column 2, were forced into one factor; the extraction
method is principal components analysis; the orthogonal rotation method used is Varimax with Kaiser
normalisation; the attributes location, ability to provide NAS and independence were unable to be
factor analysed because they were single attributes;
b
a positive (negative) t-statistic that is signi?cant
( p , 0.10, one-tailed) indicates that the variable is more important to rotators (retainers); where:
intention to rotate – categorical dependent variable, coded one for intention to rotate, zero otherwise;
independent variables – continuous independent variables; factor scores derived from factor
analysing attributes comprising the corresponding attribute category, or attribute mean scores where
the category contained a single attribute; single attribute categories are location, ability to provide
NAS, and independence
Table V.
Results of t-tests of mean
differences between
rotators and retainers
ARJ
24,2
128
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
Table X shows that the model is signi?cant overall (x
2
statistic ¼ 18.211,
prob. , 0.000) and the Nagelkerke R
2
is 21.1 percent. The coef?cients for technical
expertise (Wald ¼ 3.400, p , 0.065), and other (Wald ¼ 2.830, p , 0.093) are positive
and signi?cant (one-tailed). The other category comprises, inter alia, attributes of audit
?rm reputation and independence. The sensitivity results support those in the main
analysis and, in turn, provide support for the hypothesis that councils predisposed to
rotate auditors because of dissatisfaction with the quality of their incumbent are
rotating towards a quality auditor where a quality auditor is proxied by technical
competence, independence and reputation.
5. Discussion and conclusions
The ?rst purpose of this study was to provide descriptive evidence on what auditor
and audit environmental attributes affect auditor appointment decisions in the context
of compulsory audit tendering. We found the most important attributes affecting
appointment decisions overall (for the total sample) relate to the quality of councils’
experience with their incumbent auditor; speci?cally the overall quality of audit
services provided by the audit ?rm, the quality of the ?rm’s advice to council
Factor score/attribute
a,b
coef?cient Coef?cient Wald statistic Sig. (one-tailed)
c
Constant 22.443 4.782 0.029
Audit ?rm reputation 0.509 1.955 0.081
*
Location 20.155 0.909 0.170
Ability to provide NAS 20.223 0.957 0.164
Technical competence 0.812 3.921 0.024
* *
Audit plan 20.071 0.029 0.432
Audit fee 20.037 0.015 0.452
Independence 0.517 1.624 0.101
*
Relationships with the incumbent audit ?rm 20.174 0.231 0.315
Tender documents/process 0.010 0.001 0.488
Notes: Categorical dependent variable, intention to rotate audit ?rm, coded one, versus intention to
retain the incumbent auditor, coded zero; signi?cant at the
*
10,
* *
5, and
* * *
1 percent levels (one-
tailed);
a
each of the attributes comprising the categories reported in Table I, column 2, were forced into
one factor; the extraction method is principal components analysis; the orthogonal rotation method
used is Varimax with Kaiser normalisation; the attributes location, ability to provide NAS and
independence were unable to be factor analysed because they were single attributes;
b
the logistic
regression was run with the demographics shown in Appendix 1 as proxies for controls, i.e. other
factors that may affect the auditor appointment decision; the controls were: (i) length of time in
position, (ii) size (population and revenue), (iii) council location, (iv) type of audit ?rm of incumbent
auditor, (v) length of incumbent auditor’s tenure, (vi) type of council’s last audit report, and (vii) the
number of bids expected to be received if bids were called now; the only control that was signi?cant
was bids, which indicated the competitiveness of the market; none of the other controls were
signi?cant; therefore, none of the results for the controls are reported;
c
a positive (negative) coef?cient
that is signi?cant ( p , 0.10, one-tailed) indicates that the variable is more important to rotators
(retainers); sample size: 123; correct classi?cation: 79.7 percent; x
2
statistic ¼ 18.929; prob. , 0.000;
Nagelkerke R
2
: 21.9 percent; where: intention to rotate – categorical dependent variable, coded one for
intention to rotate, zero otherwise; independent variables – continuous independent variables; factor
scores derived from factor analysing attributes comprising the corresponding attribute category,
or attribute mean scores where the category contained a single attribute; single attribute categories are
location, ability to provide NAS, and independence
Table VI.
Logit model relating
auditor attributes
to intention
to rotate auditors
Auditor
appointment
129
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
A
t
t
r
i
b
u
t
e
n
o
.
A
t
t
r
i
b
u
t
e
d
e
s
c
r
i
p
t
i
o
n
C
a
p
a
c
i
t
y
-
i
n
c
l
u
d
i
n
g
q
u
a
l
i
t
y
a
n
d
a
v
a
i
l
a
b
i
l
i
t
y
o
f
w
o
r
k
f
o
r
c
e
(
1
0
0
%
)
1
2
T
h
e
t
e
c
h
n
i
c
a
l
q
u
a
l
i
?
c
a
t
i
o
n
s
o
f
t
h
e
a
u
d
i
t
t
e
a
m
s
u
p
e
r
v
i
s
o
r
(
s
)
(
0
.
2
5
1
)
1
1
T
h
e
t
e
c
h
n
i
c
a
l
q
u
a
l
i
?
c
a
t
i
o
n
s
o
f
t
h
e
a
u
d
i
t
t
e
a
m
m
a
n
a
g
e
r
(
s
)
(
0
.
2
4
6
)
1
0
T
h
e
t
e
c
h
n
i
c
a
l
q
u
a
l
i
?
c
a
t
i
o
n
s
o
f
t
h
e
a
u
d
i
t
e
n
g
a
g
e
m
e
n
t
p
a
r
t
n
e
r
(
s
)
(
0
.
2
3
7
)
3
1
T
h
e
p
r
o
p
o
s
e
d
i
n
v
o
l
v
e
m
e
n
t
o
f
t
h
e
a
u
d
i
t
m
a
n
a
g
e
r
(
s
)
i
n
t
h
e
c
o
n
d
u
c
t
o
f
t
h
e
a
u
d
i
t
i
n
t
e
r
m
s
o
f
e
s
t
i
m
a
t
e
d
a
u
d
i
t
h
o
u
r
s
(
0
.
2
1
5
)
3
4
T
h
e
p
r
o
p
o
s
e
d
i
n
v
o
l
v
e
m
e
n
t
o
f
t
h
e
a
u
d
i
t
t
e
a
m
s
u
p
e
r
v
i
s
o
r
(
s
)
i
n
t
h
e
c
o
n
d
u
c
t
o
f
t
h
e
a
u
d
i
t
i
n
t
e
r
m
s
o
f
e
s
t
i
m
a
t
e
d
a
u
d
i
t
h
o
u
r
s
(
0
.
1
9
1
)
2
2
T
h
e
p
r
o
p
o
s
e
d
i
n
v
o
l
v
e
m
e
n
t
o
f
t
h
e
a
u
d
i
t
p
a
r
t
n
e
r
(
s
)
i
n
t
h
e
c
o
n
d
u
c
t
o
f
t
h
e
a
u
d
i
t
i
n
t
e
r
m
s
o
f
e
s
t
i
m
a
t
e
d
a
u
d
i
t
h
o
u
r
s
(
0
.
1
7
3
)
K
a
i
s
e
r
-
M
e
y
e
r
-
O
l
k
i
n
m
e
a
s
u
r
e
o
f
s
a
m
p
l
i
n
g
a
d
e
q
u
a
c
y
¼
0
.
7
6
2
B
a
r
t
l
e
t
t
’
s
t
e
s
t
o
f
s
p
h
e
r
i
c
i
t
y
:
a
p
p
r
o
x
.
x
2
4
7
8
.
1
5
4
,
(
s
i
g
.
)
¼
(
0
.
0
0
0
)
Q
u
a
l
i
t
y
a
n
d
d
e
p
t
h
o
f
a
u
d
i
t
p
e
r
f
o
r
m
a
n
c
e
a
n
d
e
x
p
e
r
i
e
n
c
e
(
1
0
0
%
)
3
2
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
a
u
d
i
t
t
e
a
m
s
u
p
e
r
v
i
s
o
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
a
u
d
i
t
s
g
e
n
e
r
a
l
l
y
(
0
.
2
4
7
)
2
9
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
a
u
d
i
t
m
a
n
a
g
e
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
a
u
d
i
t
s
g
e
n
e
r
a
l
l
y
(
0
.
2
4
4
)
2
0
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
a
u
d
i
t
e
n
g
a
g
e
m
e
n
t
p
a
r
t
n
e
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
a
u
d
i
t
s
g
e
n
e
r
a
l
l
y
(
0
.
2
1
6
)
3
8
T
h
e
o
v
e
r
a
l
l
q
u
a
l
i
t
y
o
f
a
u
d
i
t
s
e
r
v
i
c
e
s
p
r
o
v
i
d
e
d
b
y
t
h
e
a
u
d
i
t
?
r
m
(
0
.
1
9
3
)
3
9
T
h
e
q
u
a
l
i
t
y
o
f
t
h
e
a
u
d
i
t
?
r
m
’
s
a
d
v
i
c
e
t
o
c
o
u
n
c
i
l
m
a
n
a
g
e
m
e
n
t
,
i
n
c
l
u
d
i
n
g
m
a
n
a
g
e
m
e
n
t
l
e
t
t
e
r
s
,
i
n
t
e
r
n
a
l
c
o
n
t
r
o
l
r
e
p
o
r
t
s
(
0
.
1
8
6
)
3
7
T
h
e
a
b
i
l
i
t
y
o
f
t
h
e
a
u
d
i
t
p
a
r
t
n
e
r
(
s
)
t
o
m
e
e
t
d
e
a
d
l
i
n
e
s
(
0
.
1
8
2
)
4
7
D
e
t
a
i
l
s
o
f
m
a
j
o
r
a
u
d
i
t
c
l
i
e
n
t
s
o
f
t
h
e
a
u
d
i
t
?
r
m
(
0
.
1
3
8
)
8
P
r
e
v
i
o
u
s
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
a
u
d
i
t
?
r
m
w
i
t
h
y
o
u
r
c
o
u
n
c
i
l
a
s
a
n
i
n
c
u
m
b
e
n
t
a
u
d
i
t
o
r
(
0
.
1
0
5
)
K
a
i
s
e
r
-
M
e
y
e
r
-
O
l
k
i
n
m
e
a
s
u
r
e
o
f
s
a
m
p
l
i
n
g
a
d
e
q
u
a
c
y
¼
0
.
8
0
6
B
a
r
t
l
e
t
t
’
s
t
e
s
t
o
f
s
p
h
e
r
i
c
i
t
y
:
a
p
p
r
o
x
.
x
2
2
7
9
.
3
4
6
,
(
s
i
g
.
)
¼
(
0
.
0
0
0
)
P
r
o
p
o
s
e
d
a
u
d
i
t
p
l
a
n
(
1
0
0
%
)
1
4
T
h
e
n
a
t
u
r
e
o
f
t
h
e
p
r
o
p
o
s
e
d
a
u
d
i
t
a
p
p
r
o
a
c
h
(
0
.
3
1
5
)
1
3
T
h
e
d
e
t
a
i
l
a
n
d
c
o
m
p
l
e
t
e
n
e
s
s
o
f
t
h
e
p
r
o
p
o
s
e
d
a
u
d
i
t
p
l
a
n
(
0
.
3
0
0
)
1
5
T
h
e
p
r
o
p
o
s
e
d
n
u
m
b
e
r
o
f
h
o
u
r
s
t
o
c
o
n
d
u
c
t
t
h
e
a
u
d
i
t
(
f
r
o
m
t
h
e
b
e
g
i
n
n
i
n
g
o
f
?
e
l
d
w
o
r
k
t
o
t
h
e
a
u
d
i
t
r
e
p
o
r
t
d
a
t
e
)
(
0
.
2
7
9
)
2
3
T
h
e
c
o
m
p
u
t
e
r
a
u
d
i
t
c
a
p
a
b
i
l
i
t
y
o
f
t
h
e
a
u
d
i
t
?
r
m
(
0
.
2
4
9
)
1
6
T
h
e
p
r
o
p
o
s
e
d
t
i
m
i
n
g
o
f
a
u
d
i
t
w
o
r
k
i
n
t
e
r
m
s
o
f
t
h
e
n
u
m
b
e
r
,
d
u
r
a
t
i
o
n
a
n
d
a
p
p
r
o
x
i
m
a
t
e
d
a
t
e
o
f
v
i
s
i
t
s
b
y
t
h
e
a
u
d
i
t
?
r
m
(
0
.
2
3
8
)
K
a
i
s
e
r
-
M
e
y
e
r
-
O
l
k
i
n
m
e
a
s
u
r
e
o
f
s
a
m
p
l
i
n
g
a
d
e
q
u
a
c
y
¼
0
.
7
2
1
B
a
r
t
l
e
t
t
’
s
t
e
s
t
o
f
s
p
h
e
r
i
c
i
t
y
:
a
p
p
r
o
x
.
x
2
1
6
9
.
1
0
4
,
(
s
i
g
.
)
¼
(
0
.
0
0
0
)
P
r
i
c
e
(
1
0
0
%
)
1
7
T
h
e
c
o
m
p
e
t
i
t
i
v
e
n
e
s
s
o
f
t
h
e
p
r
i
c
i
n
g
s
t
r
u
c
t
u
r
e
o
f
t
h
e
a
u
d
i
t
?
r
m
f
o
r
t
h
e
p
r
o
v
i
s
i
o
n
o
f
a
u
d
i
t
s
e
r
v
i
c
e
s
(
0
.
5
8
3
)
1
8
T
h
e
a
u
d
i
t
f
e
e
e
s
t
i
m
a
t
e
p
r
o
v
i
d
e
d
b
y
t
h
e
a
u
d
i
t
?
r
m
i
s
c
o
m
m
e
n
s
u
r
a
t
e
w
i
t
h
t
h
e
a
u
d
i
t
w
o
r
k
r
e
q
u
i
r
e
d
(
0
.
5
8
3
)
(
c
o
n
t
i
n
u
e
d
)
Table VII.
Sensitivity analysis
ARJ
24,2
130
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
A
t
t
r
i
b
u
t
e
n
o
.
A
t
t
r
i
b
u
t
e
d
e
s
c
r
i
p
t
i
o
n
K
a
i
s
e
r
-
M
e
y
e
r
-
O
l
k
i
n
m
e
a
s
u
r
e
o
f
s
a
m
p
l
i
n
g
a
d
e
q
u
a
c
y
¼
0
.
5
0
0
B
a
r
t
l
e
t
t
’
s
t
e
s
t
o
f
s
p
h
e
r
i
c
i
t
y
:
a
p
p
r
o
x
.
x
2
3
0
.
1
5
9
,
(
s
i
g
.
)
¼
(
0
.
0
0
0
)
V
a
l
u
e
-
a
d
d
e
d
s
e
r
v
i
c
e
s
(
1
0
0
%
)
2
8
Q
u
a
l
i
t
y
o
f
w
o
r
k
i
n
g
r
e
l
a
t
i
o
n
s
h
i
p
s
w
i
t
h
t
h
e
a
u
d
i
t
e
n
g
a
g
e
m
e
n
t
s
t
a
f
f
(
0
.
4
1
5
)
2
7
Q
u
a
l
i
t
y
o
f
w
o
r
k
i
n
g
r
e
l
a
t
i
o
n
s
h
i
p
w
i
t
h
t
h
e
a
u
d
i
t
p
a
r
t
n
e
r
(
s
)
(
0
.
4
0
9
)
3
6
T
h
e
a
c
c
e
s
s
i
b
i
l
i
t
y
o
f
t
h
e
p
a
r
t
n
e
r
(
s
)
-
i
n
-
c
h
a
r
g
e
o
f
t
h
e
e
n
g
a
g
e
m
e
n
t
(
0
.
2
7
1
)
3
T
h
e
c
a
p
a
b
i
l
i
t
y
o
f
t
h
e
a
u
d
i
t
?
r
m
t
o
p
r
o
v
i
d
e
n
o
n
-
a
u
d
i
t
s
e
r
v
i
c
e
s
s
u
c
h
a
s
o
p
e
r
a
t
i
o
n
a
l
a
u
d
i
t
s
a
n
d
/
o
r
c
o
n
s
u
l
t
i
n
g
s
e
r
v
i
c
e
s
(
0
.
2
1
9
)
K
a
i
s
e
r
-
M
e
y
e
r
-
O
l
k
i
n
m
e
a
s
u
r
e
o
f
s
a
m
p
l
i
n
g
a
d
e
q
u
a
c
y
¼
0
.
6
2
0
B
a
r
t
l
e
t
t
’
s
t
e
s
t
o
f
s
p
h
e
r
i
c
i
t
y
:
a
p
p
r
o
x
.
x
2
1
5
1
.
6
8
2
,
(
s
i
g
.
)
¼
(
0
.
0
0
0
)
T
e
c
h
n
i
c
a
l
e
x
p
e
r
t
i
s
e
(
1
0
0
%
)
3
0
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
a
u
d
i
t
m
a
n
a
g
e
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
l
o
c
a
l
g
o
v
e
r
n
m
e
n
t
a
u
d
i
t
s
(
0
.
2
9
3
)
3
3
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
a
u
d
i
t
t
e
a
m
s
u
p
e
r
v
i
s
o
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
l
o
c
a
l
g
o
v
e
r
n
m
e
n
t
a
u
d
i
t
s
(
0
.
2
8
6
)
2
1
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
a
u
d
i
t
e
n
g
a
g
e
m
e
n
t
p
a
r
t
n
e
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
l
o
c
a
l
g
o
v
e
r
n
m
e
n
t
a
u
d
i
t
s
(
0
.
2
6
6
)
6
T
h
e
a
u
d
i
t
?
r
m
i
s
c
o
n
s
i
d
e
r
e
d
t
o
b
e
a
s
p
e
c
i
a
l
i
s
t
i
n
l
o
c
a
l
g
o
v
e
r
n
m
e
n
t
a
u
d
i
t
(
0
.
2
4
6
)
4
4
D
e
t
a
i
l
s
o
f
o
t
h
e
r
c
o
u
n
c
i
l
s
c
u
r
r
e
n
t
l
y
a
u
d
i
t
e
d
b
y
t
h
e
a
u
d
i
t
?
r
m
(
0
.
1
6
5
)
K
a
i
s
e
r
-
M
e
y
e
r
-
O
l
k
i
n
m
e
a
s
u
r
e
o
f
s
a
m
p
l
i
n
g
a
d
e
q
u
a
c
y
¼
0
.
8
0
6
B
a
r
t
l
e
t
t
’
s
t
e
s
t
o
f
s
p
h
e
r
i
c
i
t
y
:
a
p
p
r
o
x
.
x
2
2
8
1
.
1
0
7
,
(
s
i
g
.
)
¼
(
0
.
0
0
0
)
R
e
f
e
r
e
e
s
(
1
0
0
%
)
4
5
R
e
f
e
r
e
n
c
e
s
f
r
o
m
s
e
n
i
o
r
N
S
W
l
o
c
a
l
c
o
u
n
c
i
l
r
e
p
r
e
s
e
n
t
a
t
i
v
e
s
t
h
a
t
h
a
v
e
e
x
p
e
r
i
e
n
c
e
w
i
t
h
t
h
e
a
u
d
i
t
?
r
m
(
0
.
5
1
8
)
4
8
R
e
f
e
r
e
n
c
e
s
f
r
o
m
m
a
j
o
r
a
u
d
i
t
c
l
i
e
n
t
s
o
f
t
h
e
a
u
d
i
t
?
r
m
(
0
.
5
1
6
)
2
5
T
h
e
a
u
d
i
t
?
r
m
i
s
a
c
c
e
p
t
a
b
l
e
t
o
t
h
e
c
o
u
n
c
i
l
’
s
r
e
g
u
l
a
t
o
r
s
(
0
.
2
9
5
)
K
a
i
s
e
r
-
M
e
y
e
r
-
O
l
k
i
n
m
e
a
s
u
r
e
o
f
s
a
m
p
l
i
n
g
a
d
e
q
u
a
c
y
¼
0
.
5
4
7
B
a
r
t
l
e
t
t
’
s
t
e
s
t
o
f
s
p
h
e
r
i
c
i
t
y
:
a
p
p
r
o
x
.
x
2
4
0
.
9
9
7
,
(
s
i
g
.
)
¼
(
0
.
0
0
0
)
T
e
n
d
e
r
p
r
o
p
o
s
a
l
p
r
o
c
e
s
s
(
1
0
0
%
)
4
2
T
h
e
q
u
a
l
i
t
y
o
f
t
h
e
a
u
d
i
t
?
r
m
’
s
w
r
i
t
t
e
n
t
e
n
d
e
r
p
r
o
p
o
s
a
l
(
0
.
4
7
5
)
4
3
T
h
e
q
u
a
l
i
t
y
o
f
t
h
e
a
u
d
i
t
?
r
m
’
s
o
r
a
l
p
r
e
s
e
n
t
a
t
i
o
n
(
0
.
4
5
7
)
4
6
T
h
e
p
e
r
s
o
n
a
l
r
e
l
a
t
i
o
n
s
h
i
p
s
e
s
t
a
b
l
i
s
h
e
d
b
e
t
w
e
e
n
t
h
e
a
u
d
i
t
?
r
m
’
s
k
e
y
p
e
o
p
l
e
a
n
d
c
o
u
n
c
i
l
m
a
n
a
g
e
m
e
n
t
d
u
r
i
n
g
t
h
e
c
o
u
r
s
e
o
f
t
h
e
t
e
n
d
e
r
p
r
o
p
o
s
a
l
p
r
o
c
e
s
s
(
0
.
3
3
5
)
K
a
i
s
e
r
-
M
e
y
e
r
-
O
l
k
i
n
m
e
a
s
u
r
e
o
f
s
a
m
p
l
i
n
g
a
d
e
q
u
a
c
y
¼
0
.
5
8
5
B
a
r
t
l
e
t
t
’
s
t
e
s
t
o
f
s
p
h
e
r
i
c
i
t
y
:
a
p
p
r
o
x
.
x
2
7
2
.
6
8
5
,
(
s
i
g
.
)
¼
(
0
.
0
0
0
)
(
c
o
n
t
i
n
u
e
d
)
Table VII.
Auditor
appointment
131
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
A
t
t
r
i
b
u
t
e
n
o
.
A
t
t
r
i
b
u
t
e
d
e
s
c
r
i
p
t
i
o
n
O
t
h
e
r
(
1
0
0
%
)
5
T
h
e
a
u
d
i
t
?
r
m
i
s
a
s
m
a
l
l
i
n
t
e
r
n
a
t
i
o
n
a
l
o
r
n
a
t
i
o
n
a
l
a
u
d
i
t
?
r
m
(
0
.
2
1
1
)
9
T
h
e
r
e
p
u
t
a
t
i
o
n
o
f
t
h
e
a
u
d
i
t
e
n
g
a
g
e
m
e
n
t
p
a
r
t
n
e
r
(
s
)
(
0
.
2
0
3
)
4
0
T
h
e
a
u
d
i
t
?
r
m
i
s
a
l
a
r
g
e
l
o
c
a
l
o
r
r
e
g
i
o
n
a
l
a
u
d
i
t
?
r
m
(
0
.
1
9
4
)
4
T
h
e
a
u
d
i
t
?
r
m
i
s
a
B
i
g
4
i
n
t
e
r
n
a
t
i
o
n
a
l
a
u
d
i
t
?
r
m
(
0
.
1
9
4
)
4
1
T
h
e
a
u
d
i
t
?
r
m
i
s
a
s
m
a
l
l
l
o
c
a
l
a
u
d
i
t
?
r
m
(
0
.
1
8
3
)
1
T
h
e
o
v
e
r
a
l
l
r
e
p
u
t
a
t
i
o
n
o
f
t
h
e
a
u
d
i
t
?
r
m
(
0
.
1
7
9
)
2
4
T
h
e
a
u
d
i
t
?
r
m
i
s
n
o
t
i
n
v
o
l
v
e
d
i
n
e
m
b
a
r
r
a
s
s
i
n
g
l
i
t
i
g
a
t
i
o
n
(
0
.
1
6
4
)
3
5
B
e
l
i
e
f
t
h
a
t
t
h
e
a
u
d
i
t
?
r
m
w
i
l
l
g
i
v
e
t
h
e
c
o
u
n
c
i
l
a
n
u
n
q
u
a
l
i
?
e
d
a
u
d
i
t
r
e
p
o
r
t
(
0
.
1
3
6
)
1
9
T
h
e
i
n
d
e
p
e
n
d
e
n
c
e
o
f
t
h
e
a
u
d
i
t
?
r
m
f
r
o
m
y
o
u
r
c
o
u
n
c
i
l
(
0
.
1
2
8
)
2
T
h
e
r
e
p
u
t
a
t
i
o
n
o
f
t
h
e
a
u
d
i
t
?
r
m
i
n
p
r
o
v
i
d
i
n
g
a
u
d
i
t
s
e
r
v
i
c
e
s
t
o
l
o
c
a
l
c
o
u
n
c
i
l
s
(
0
.
1
1
0
)
2
6
T
h
e
a
u
d
i
t
?
r
m
’
s
p
r
o
f
e
s
s
i
o
n
a
l
i
n
d
e
m
n
i
t
y
i
n
s
u
r
a
n
c
e
c
o
m
p
l
i
e
s
w
i
t
h
t
h
e
m
i
n
i
m
u
m
r
e
q
u
i
r
e
m
e
n
t
s
o
f
I
C
A
A
o
r
C
P
A
A
u
s
t
r
a
l
i
a
(
0
.
0
8
9
)
7
T
h
e
a
u
d
i
t
?
r
m
h
a
s
a
n
o
f
?
c
e
i
n
c
l
o
s
e
p
r
o
x
i
m
i
t
y
t
o
t
h
e
c
o
u
n
c
i
l
(
0
.
0
6
4
)
K
a
i
s
e
r
-
M
e
y
e
r
-
O
l
k
i
n
m
e
a
s
u
r
e
o
f
s
a
m
p
l
i
n
g
a
d
e
q
u
a
c
y
¼
0
.
6
5
0
B
a
r
t
l
e
t
t
’
s
t
e
s
t
o
f
s
p
h
e
r
i
c
i
t
y
:
a
p
p
r
o
x
.
x
2
4
6
6
.
4
8
5
,
(
s
i
g
.
)
¼
(
0
.
0
0
0
)
N
o
t
e
s
:
C
o
n
?
r
m
a
t
o
r
y
f
a
c
t
o
r
a
n
a
l
y
s
i
s
a
s
p
e
r
t
h
e
s
a
m
p
l
e
t
e
n
d
e
r
s
p
e
c
i
?
c
a
t
i
o
n
;
e
a
c
h
o
f
t
h
e
a
t
t
r
i
b
u
t
e
s
c
o
m
p
r
i
s
i
n
g
t
h
e
c
a
t
e
g
o
r
i
e
s
r
e
p
o
r
t
e
d
i
n
T
a
b
l
e
I
I
,
c
o
l
u
m
n
1
,
w
e
r
e
f
o
r
c
e
d
i
n
t
o
o
n
e
f
a
c
t
o
r
;
t
h
e
e
x
t
r
a
c
t
i
o
n
m
e
t
h
o
d
i
s
p
r
i
n
c
i
p
a
l
c
o
m
p
o
n
e
n
t
s
a
n
a
l
y
s
i
s
;
t
h
e
o
r
t
h
o
g
o
n
a
l
r
o
t
a
t
i
o
n
m
e
t
h
o
d
u
s
e
d
i
s
V
a
r
i
m
a
x
w
i
t
h
K
a
i
s
e
r
n
o
r
m
a
l
i
s
a
t
i
o
n
;
t
h
e
n
u
m
b
e
r
s
i
n
p
a
r
e
n
t
h
e
s
e
s
a
f
t
e
r
t
h
e
a
t
t
r
i
b
u
t
e
d
e
s
c
r
i
p
t
i
o
n
s
a
r
e
t
h
e
f
a
c
t
o
r
l
o
a
d
i
n
g
s
f
r
o
m
t
h
e
p
o
o
l
e
d
f
a
c
t
o
r
a
n
a
l
y
s
i
s
Table VII.
ARJ
24,2
132
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
I
n
t
e
n
t
i
o
n
t
o
r
o
t
a
t
e
C
a
p
a
c
i
t
y
-
i
n
c
l
u
d
i
n
g
q
u
a
l
i
t
y
a
n
d
a
v
a
i
l
a
b
i
l
i
t
y
o
f
w
o
r
k
f
o
r
c
e
Q
u
a
l
i
t
y
a
n
d
d
e
p
t
h
o
f
a
u
d
i
t
p
e
r
f
o
r
m
a
n
c
e
a
n
d
e
x
p
e
r
i
e
n
c
e
P
r
o
p
o
s
e
d
a
u
d
i
t
p
l
a
n
P
r
i
c
e
V
a
l
u
e
-
a
d
d
e
d
s
e
r
v
i
c
e
s
T
e
c
h
n
i
c
a
l
e
x
p
e
r
t
i
s
e
R
e
f
e
r
e
e
s
T
e
n
d
e
r
p
r
o
p
o
s
a
l
p
r
o
c
e
s
s
O
t
h
e
r
I
n
t
e
n
t
i
o
n
t
o
r
o
t
a
t
e
1
.
0
0
0
C
a
p
a
c
i
t
y
-
i
n
c
l
u
d
i
n
g
q
u
a
l
i
t
y
a
n
d
a
v
a
i
l
a
b
i
l
i
t
y
o
f
w
o
r
k
f
o
r
c
e
0
.
2
3
5
*
*
1
.
0
0
0
Q
u
a
l
i
t
y
a
n
d
d
e
p
t
h
o
f
a
u
d
i
t
p
e
r
f
o
r
m
a
n
c
e
a
n
d
e
x
p
e
r
i
e
n
c
e
0
.
2
2
1
*
0
.
6
6
1
*
*
1
.
0
0
0
P
r
o
p
o
s
e
d
a
u
d
i
t
p
l
a
n
0
.
1
9
0
*
0
.
6
0
4
*
*
0
.
6
1
0
*
*
1
.
0
0
0
P
r
i
c
e
0
.
1
1
4
0
.
3
8
3
*
*
0
.
4
4
4
*
*
0
.
4
6
6
*
*
1
.
0
0
0
V
a
l
u
e
-
a
d
d
e
d
s
e
r
v
i
c
e
s
0
.
1
5
3
0
.
6
6
2
*
*
0
.
6
6
3
*
*
0
.
6
2
0
*
*
0
.
4
7
5
*
*
1
.
0
0
0
T
e
c
h
n
i
c
a
l
e
x
p
e
r
t
i
s
e
0
.
3
1
0
*
*
0
.
5
5
4
*
*
0
.
5
5
4
*
*
0
.
5
1
0
*
*
0
.
3
6
2
*
*
0
.
4
3
5
*
*
1
.
0
0
0
R
e
f
e
r
e
e
s
0
.
1
8
2
*
0
.
4
1
9
*
*
0
.
4
1
9
*
*
0
.
4
0
7
*
*
0
.
3
4
2
*
*
0
.
3
7
1
*
*
0
.
4
7
5
*
*
1
.
0
0
0
T
e
n
d
e
r
p
r
o
p
o
s
a
l
p
r
o
c
e
s
s
0
.
1
3
7
0
.
3
3
6
*
*
0
.
3
3
6
*
*
0
.
3
6
1
*
*
0
.
4
1
3
*
*
0
.
3
2
3
*
*
0
.
3
8
9
*
*
0
.
4
9
0
*
*
1
.
0
0
0
O
t
h
e
r
0
.
3
4
6
*
*
*
0
.
4
4
0
*
*
0
.
5
6
7
0
.
4
9
3
0
.
4
9
3
0
.
2
3
7
0
.
5
5
2
0
.
5
0
7
0
.
4
4
2
1
.
0
0
0
N
o
t
e
s
:
C
o
r
r
e
l
a
t
i
o
n
i
s
s
i
g
n
i
?
c
a
n
t
a
t
t
h
e
*
0
.
0
5
a
n
d
*
*
0
.
0
1
l
e
v
e
l
s
;
n
¼
1
2
3
;
w
h
e
r
e
:
i
n
t
e
n
t
i
o
n
t
o
r
o
t
a
t
e
–
c
a
t
e
g
o
r
i
c
a
l
d
e
p
e
n
d
e
n
t
v
a
r
i
a
b
l
e
,
c
o
d
e
d
o
n
e
f
o
r
i
n
t
e
n
t
i
o
n
t
o
r
o
t
a
t
e
,
z
e
r
o
o
t
h
e
r
w
i
s
e
;
i
n
d
e
p
e
n
d
e
n
t
v
a
r
i
a
b
l
e
s
–
c
o
n
t
i
n
u
o
u
s
i
n
d
e
p
e
n
d
e
n
t
v
a
r
i
a
b
l
e
s
,
f
a
c
t
o
r
s
c
o
r
e
s
d
e
r
i
v
e
d
f
r
o
m
f
a
c
t
o
r
a
n
a
l
y
s
i
n
g
a
t
t
r
i
b
u
t
e
s
c
o
m
p
r
i
s
i
n
g
t
h
e
c
o
r
r
e
s
p
o
n
d
i
n
g
a
t
t
r
i
b
u
t
e
c
a
t
e
g
o
r
y
Table VIII.
Sensitivity analysis,
Spearman correlations
among dependent
variable intention to
rotate and independent
variables
Auditor
appointment
133
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
management, and the ability of the audit partner(s) to meet deadlines. Also of high
importance are the reputation of the ?rm (both in providing audit services to councils
and overall), independence, technical expertise and the experience of the audit team in
conducting local government audits and audits generally. The least important
attributes included the size and type of the audit ?rm, the ability to provide non-audit
services, and location in terms of proximity to the council.
The second purpose of the study was to examine whether the attributes that affect
the appointment of a new auditor (a rotation decision) are consistent with, or different
from, those that affect the reappointment of the incumbent auditor (a retention
decision). We found that respondents predisposed to rotate were more highly sensitised
to the importance of the 48 individual attributes than those predisposed to retain.
We also found that three attribute groupings were considered more important to
rotators; technical competence, audit ?rm reputation and independence. These ?ndings
are consistent with the hypothesis that councils predisposed to rotate auditors because
of dissatisfaction with the quality of their incumbent will rate attributes proxying for a
quality auditor as more important than councils predisposed to retain their incumbent.
Given the predominance in our sample of councils intending to retain the incumbent,
these ?ndings also support the premise that satisfaction with the quality of the
incumbent auditor is associated with retention.
Several conclusions may be drawn fromthese ?ndings. The ?rst is the importance of
attributes associated with a quality auditor in councils’ appointment decisions. Prior
studies of attributes affecting auditor appointment or reappointment decisions in the
voluntary audit tendering context have typically found technical competence to be
the most important (Addams and Allred, 2002; Beattie and Fearnley, 1995, Deloitte,
Mean value of factor scores
a
Test results
Factor score
a
Potential rotators
(n ¼ 27)
Potential retainers
(n ¼ 96) t-statistic
Signi?cance
b
(one tailed)
Capacity-including quality
and availability of workforce 0.4004417091 20.1126242307 2.401 0.018
* *
Quality and depth of audit
performance and experience 0.4165904500 20.1171660641 2.503 0.014
* *
Proposed audit plan 0.3732064391 20.1049643110 2.231 0.028
* *
Price 0.2052784506 20.0577345642 1.210 0.229
Value-added services 0.2400328353 20.0675092349 1.418 0.159
Technical expertise 0.5337875949 20.1501277611 3.261 0.001
* * *
Referees 0.3248694263 20.0913695261 1.932 0.056
*
Tender proposal process 0.2794104523 20.0785841897 1.655 0.101
Other 0.5627840704 20.1582830198 3.455 0.001
* * *
Notes: Results of t-tests of mean differences between rotators and retainers; signi?cant at the
*
10,
* *
5,
and
* * *
1 percent levels (one-tailed);
a
each of the attributes comprising the categories reported in
Table II, column 1, were forced into one factor; the extraction method is principal components
analysis; the orthogonal rotation method used is Varimax with Kaiser normalisation;
b
a positive
(negative) t-statistic that is signi?cant ( p , 0.10, one-tailed) indicates that the variable is more
important to rotators (retainers); where: intention to rotate – categorical dependent variable, coded
one for intention to rotate, zero otherwise; independent variables – continuous independent
variables, factor scores derived from factor analysing attributes comprising the corresponding
attribute category
Table IX.
Sensitivity analysis
ARJ
24,2
134
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
Haskins and Sells, 1978). We also ?nd technical competence to be important. However,
we ?nd further that other attributes associated with a quality auditor, speci?cally
reputation, independence, technical expertise and experience (including industry
experience), are important both in appointment decisions overall and to councils seeking
to rotate their incumbent. Our ?ndings are consistent with the literature that de?nes
audit quality generally in these terms (DeAngelo, 1981a; Herrbach, 2001; Moizer, 1997),
and suggest that audit quality considerations in the context of compulsory audit
tendering are no less important than in the voluntary tendering context.
The secondconclusionis that, althoughone audit fee attribute (the fee is commensurate
with the work required) ranked highly in importance, the other (the competitiveness of the
fee) ranked much lower. The introduction of compulsory audit tendering to NSW local
councils in 1993 had the effect of decreasing fees to a relatively common level across
competing?rms, suchthat fee competitiveness is not animportant attribute insubsequent
tenders. By contrast with the context of voluntary tendering where fee minimization is a
signi?cant motivationfor tendering, andfee considerations are likelytobe more important
than quality considerations (Beattie and Fearnley, 1995), we ?nd that fees are less
important than audit quality attributes in auditor appointment in the compulsory audit
tendering context.
Factor score
a,b
Coef?cient
Wald
statistic
Sig.
(one-tailed)
c
Constant 21.573 31.779 0.000
Capacity-including quality and availability of workforce 0.230 0.303 0.582
Quality and depth of audit performance and experience 0.005 0.000 0.990
Proposed audit plan 0.123 0.085 0.771
Price 20.012 0.001 0.970
Value-added services 20.382 0.967 0.326
Technical expertise 0.772 3.400 0.065
*
Referees 20.161 0.220 0.639
Tender proposal process 20.035 0.011 0.916
Other 0.644 2.830 0.093
*
Notes: Categorical dependent variable, intention to rotate audit ?rm, coded one, versus intention to
retain the incumbent auditor, coded zero; signi?cant at the
*
10,
* *
5, and
* * *
1 percent levels
(one-tailed);
a
each of the attributes comprising the categories in Table II, column 1, were forced into one
factor; the extraction method is principal components analysis; the orthogonal rotation method used is
Varimax with Kaiser normalisation;
b
the logistic regression was run with the demographics shown in
Appendix 1 as proxies for controls, i.e. other factors that may affect the auditor appointment decision;
the controls were: (i) length of time in position, (ii) size (population and revenue), (iii) council location,
(iv) type of audit ?rm of incumbent auditor, (v) length of incumbent auditor’s tenure, (vi) type of
council’s last audit report, and (vii) the number of bids expected to be received if bids were called now;
the only control that was signi?cant was bids, which indicated the competitiveness of the market; none
of the other controls were signi?cant; therefore, none of the results for the controls are reported;
c
a positive (negative) coef?cient that is signi?cant ( p , 0.10, one-tailed) indicates that the variable is
more important to rotators (retainers); sample size: 123; correct classi?cation: 78.9 percent;
x
2
statistic ¼ 18.211; prob. , 0.000; Nagelkerke R
2
: 21.1 percent; where: intention to rotate –
categorical dependent variable, coded one for intention to rotate, zero otherwise; independent variables
– continuous independent variables, factor scores derived from factor analysing attributes comprising
the corresponding attribute category
Table X.
Sensitivity analysis logit
model relating auditor
attributes to intention to
rotate auditors
Auditor
appointment
135
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
These two conclusions allow the third that compulsory audit tendering is not
associated with impairment of audit quality or auditor independence. It has been debated
whether compulsory tendering might impair quality or independence because of the
pressure it can place on fee competition and on its association with long tenure periods.
We ?nd no evidence of this. By contrast, we ?nd that clients (here, councils) value the
importance of, and are likely to appoint auditors that are reputable, independent, have
audit teams with technical competence and expertise, and that provide quality services to
the council. We ?ndthat clients (councils) intendingtoretaintheir incumbent auditor doso
because of satisfaction with the quality of their incumbent; and that clients (councils) that
intend to rotate their auditor are seeking to appoint a quality auditor, where quality is
proxied by technical competence, reputation and independence.
These ?ndings have implications for regulators generally. The ?ndings suggest
that, should existing legislation requiring compulsory audit partner rotation prove
infeasible or ineffective in maintaining audit quality and auditor independence in
speci?c audit markets, compulsory audit tendering may be a viable alternative,
capable of providing such quality and independence.
Our ?ndings also have implications for the regulators of councils in NSW who
provide a sample tender speci?cation to direct councils’ auditor appointment decisions
but have no systematic evidence on how councils weight criteria in the speci?cation.
Our results show that councils place greater importance on the expertise and
experience of the audit team than they do on technical quali?cations; and on reputation
and independence than on price or value-added services. Our results also suggest that
several criteria given prominence in the speci?cation (such as references, details of
other councils and clients audited, audit time, number of visits, computer audit
capability) rank lowly in importance in councils’ decisions. These ?ndings allow
regulators to re-evaluate and potentially revise the speci?cation.
Our ?ndings also have implications for audit ?rms at tender. Tendering is costly
and our results allow ?rms to direct their tenders toward those attributes most
important to councils. For example, as noted previously, councils place greatest
importance on the overall quality of services provided by the audit ?rm, the quality of
advice to council management, and the ability of the audit partner(s) to meet deadlines.
Also of greater importance are the quality of working relationships with the audit
partner(s) and the audit engagement staff, and the accessibility of the partners(s).
These attributes are more available to councils about their incumbent auditors than
about new auditors. Nonetheless, their importance suggests that non-incumbent tenderers
might seek to provide evidence on these attributes. Although the tender speci?cation does
not address these attributes directly, it does allowtenderers toprovide anyother information
they wish to support the application. Our ?ndings suggest that evidence of the accessibility
of the audit partner, over and above the formal hours of the partner’s involvement in the
audit, might be usefully included in other information supporting the tender.
6. Limitations and future research
A limitation of our study is that we use a dichotomous dependent variable of preferred
intention to appoint a new auditor or reappoint the incumbent. This is consistent with
the decision that has to be made in practice and has literature support and precedent in
prior studies. However, a dichotomous measure precludes analysis based on the
strength of preference that might have allowed ?ner insights into the attributes
ARJ
24,2
136
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
affecting the preference. Additionally, we used preferred intention to proxy for the
actual decision. While this has support in the behavioural literature that shows
intention precedes behaviour, it remains a proxy and may have the potential to
introduce error of validity or measurement to the dependent variable.
Future research could usefully examine the relationship between the attributes that
our study ?nds to be important in the intention to retain or rotate auditors and the
attributes that are important for actual appointment/reappointment decisions. This
relationship may be examined through interviews with council ?nance managers,
or through observational research. Given the importance of audit quality attributes in
the appointment decision and the high rate of auditor retention in the compulsory audit
tendering context, future research could also usefully be conducted into the association
between attributes of audit service quality and auditor retention in this context.
Notes
1. Tenders are a reverse auction (Beattie and Fearnley, 1998b) whereby the buyers (local councils
in this study) put services out to tender. Audit tendering in NSWlocal government re?ects the
third of three types of auctions suggested by Cripps and Ireland (1994), i.e. the submission of a
joint price and quality plan with the tender allocated to the lowest priced plan that satis?es an
unknown quality threshold. The other two auction types are submission and evaluation of the
quality plan prior to bidding and price bidding prior to quality tests (Cripps and Ireland, 1994).
2. This is the case in the audit market in NSW local government. The market is dominated by
mid-tier, regional andlocal audit ?rms whichhave one specialist local government audit partner
for each of?ce (if the audit ?rm has multi-of?ces). Even in the two Big N ?rms operating in the
market, there is only one local government specialist audit partner for each of?ce, with the same
partner signing the audit report for the last three tenders, or 18 years. Hence audit ?rms in
markets similar to ours are unlikely to have the capacity to rotate audit partners.
3. Additionally, Blouin et al. (2007), in their study of forced auditor rotation of Arthur
Andersen’s clients, found no evidence that mandatory auditor rotation improves ?nancial
reporting or earnings quality.
4. There is debate as to whether compulsory audit tendering is associated with improved or
impaired audit quality. Compulsory audit tendering is argued to improve auditor
independence because it introduces a mandatory tenure period which means that the auditor
faces no dismissal risk for the period and can be more independent of management
(Communale and Sexton, 2005). At the end of the tenure period, the client may change
auditors meaning that the quality of the predecessor’s audit will be subject to scrutiny
(Petty and Cuganesan, 1996; Vanstraelen, 2000, p. 425). As the incumbent cannot assume
reappointment, the potential for their audit to be scrutinized by a new auditor is an incentive
to maintain independence and audit quality. This scrutiny is likely to be intense because new
auditors have an incentive to provide superior service in the initial years of engagement to
demonstrate their ability to deliver a quality audit (Craswell et al., 1995).
However, compulsory audit tendering is argued to impair audit quality because it is
associated with signi?cant audit fee reductions which may impair auditor independence.
If independence is compromised, there is a reduced likelihood that auditors will report any
irregularities or issue an audit modi?cation (Lennox, 2005; Barkess and Simnett, 1994), hence
resulting in lower audit quality. Compulsory audit tendering is also associated with high
auditor retention rates that introduce long periods of auditor tenure, a familiarity threat to
auditor independence, and hence the potential to lower audit quality.
5. The sample tender speci?cation itself is not a public document; however it is available in the
invitations issued by councils for the tender of audit services, which are public documents.
Auditor
appointment
137
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
While councils show some variation in the speci?c wording or format of their tender
speci?cations, the sample speci?cation is consistently in?uential therein. For example, the
tender speci?cations for Willoughby City Council (a Sydney Metropolitan Council with an
annual budget of $85m and some 30,000 rate assessments in 2006/2007) follow the sample
tender speci?cation closely (in its most recent invitation to tender for the six-year period
2007-2013). The seven assessment criteria listed in Willoughby City Council’s speci?cations
are identical in wording to the ?rst seven categories in column 1 of Table II. The tender
speci?cations for Upper Lachlan Shire Council (a rural NSW council with annual revenues of
$25m and 5,700 rate assessments) vary the wording but cover the same assessment criteria
as those in the sample speci?cation. Please refer to: www.willoughby.nsw.gov.au/IgnitionSuite/
uploads/docs/Tender%20Speci?cations%20for%20Auditing%20Services.pdf (accessed 19
May 2010).
6. Tender speci?cations are relevant in all contexts of private and public sector tendering such
that the results of our study will also be important in wider private sector jurisdictions in
which mandatory audit tendering and tenure periods are used or may be considered.
7. While the de?nitions of demand, supply and environmental characteristics broadly remain
the same across the auditor choice literature, the attributes listed under each de?nition vary
a little. See, for example, the classi?cations used in DeAngelo (1981a) and Sands and Huang
(2002) versus those used in O’Keefe and Westort (1992).
8. Views on whether rotation is a one-stage or two-stage decision process vary. Sands and Huang
(2002, pp. 168-9) note that the earlier audit literature (Burton and Roberts, 1967; Beding?eld and
Loeb, 1974) regarded rotation as a one-stage decision, considering the “termination of the
incumbent auditor’s appointment and the selection of the replacement auditor to be a one-stage
decisiontoovercome the mismatchof audit services demandedandoffered”. More recent studies
(Williams, 1988; Beattie and Fearnley, 1995, 1998a) have recognised that “terminating the
incumbent auditor’s appointment and hiring the replacement auditor are two separate events”
(Sands and Huang, 2002, p. 169). Blouin et al. (2007, p. 622) support the two-stage process, but
note that “prior auditingchange research has beenunable to examine the two actions separately
and, therefore, has focused on the joint decision”. Support for a two-stage decision process also
includes Eichenseher and Shields (1983), Francis and Wilson (1988), Beattie and Fearnley
(1998b), Sands and Huang (2002) and Sankaraguruswamy and Whisenant (2004).
9. Sands and McPhail (2003) examined whether selection criteria, and the importance of the
criteria, differed in the decision to appoint a new auditor compared to the decision to reappoint
the incumbent. Sands and McPhail examined nine attributes; technical competence, client
orientation, perceived quality of audit service, level of audit fees, reliability and courteous
accessibility, effective preparation and communication of the audit submission, range of
non-audit services, industry specialization, and geographical proximity. They found that seven
of the nine criteria were considered of equal importance for both the new auditor appointment
and incumbent reappointment decisions. Only two criteria differed, with audit fee and effective
preparation and communication of the audit submission more important to rotators.
10. There are two widely accepted methodological approaches to examine the impact of demand,
supply and environmental attributes on auditor appointment decisions; a behavioural
approach and an economic approach. Research using the behavioural approach seeks
to understand auditor choice decisions by asking those involved, predominantly via survey
questionnaires (Burton and Roberts, 1967; Beding?eld and Loeb, 1974; Casabona and Barbera,
1987; Addams and Allred, 2002), interviews (Beattie and Fearnley, 1998b) or by evaluating
Form 8-K auditor change reasons (Sankaraguruswamy and Whisenant, 2004), about the
relative importance of a range of qualitative or behavioural attributes in their decision
making. Demand side attributes (client characteristics) are not examined in this paper.
Demand side attributes are normally examined in economic modeling studies using agency
ARJ
24,2
138
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
and costly contracting theories. Examples include client size, level of gearing/leverage,
management composition/share ownership, ?nancial condition, client expansion/growth and
share issuances by the client (DeAngelo, 1981a, p. 133; Sands and Huang, 2002, p. 168).
11. The questionnaire was developedbythe leadauthor for her PhD. Toensure that the questionnaire
comprehensively captured attributes perceived to be important to auditor appointment decisions
in the compulsory audit tendering context of NSW local councils, both the sample tender
speci?cation and the auditor choice literature were used to develop the survey questionnaire for
two reasons. First, the descriptions used in the sample tender speci?cation were brief, imprecise
and/or incomplete. Second, the auditor choice literature, while extensive, did not have a
comprehensive questionnaire available as the majority of studies are practitioner based and
feature a limited number of attributes. Notable exceptions include Beattie and Feanley’s (1995)
study, which used a survey questionnaire including approximately 28 items and the Deloitte,
Haskins and Sells (1978) study, which used a survey featuring approximately 24 attributes.
12. The question numbers in column 5 are not sequential as the attributes were randomly
distributed in the questionnaire.
13. The respondents were also given a “non-applicable” option at the end of the scale.
Distinguishing between a neutral and non-applicable answer is important. Neutral means
the respondent knows and understands the attribute but is unaffected by its importance.
Non-applicable means that the respondent either does not know or the attribute is irrelevant.
14. A complete mail-out was necessary as the responses were anonymous and unidenti?able.
15. No particularities in the economic conditions or the circumstances affecting local
government were present at the time of the survey to suggest any possible history effects on
responses to the questionnaire.
16. The modi?cations were not associated with rotation. Of the 27 councils whose respondents
indicated an intention or preference to rotate auditors at the next tender, only two received a
modi?ed audit report at their last audit.
17. The ?nding that a Big 4 audit ?rm is not important to local councils is not surprising given
that (i) only two of the Big 4 audit ?rms conduct NSW local council audits, that is,
PricewaterhouseCoopers and KPMG, and (ii) only the ?rst of these is an industry specialist,
with KPMG auditing only a few NSW local councils.
18. Although not reported in Table VI, Exp(B), the proportionate change in odds, was greater than
one for all three signi?cant factor scores/attributes. Consistent with the positive coef?cient sign,
this indicates that the greater the score on the predictor variable (i.e. the higher the importance
rating of the factor/attribute), the greater the odds of the outcome (i.e. rotation) occurring.
References
Addams, H.L. and Allred, A. (2002), “Why the fastest growing companies hire and ?re their
auditors”, CPA Journal, Vol. 72, May, pp. 62-3.
Addams, H.L. and Davis, B. (1994), “Why the fastest growing companies in America hired and
?red their auditors. Privately held companies report reasons for selecting and switching
auditors”, CPA Journal, Vol. 64, August, pp. 38-41.
Addams, H.L. and Davis, B. (1996), “Publicly and privately held companies report reasons for
selecting and switching auditors”, CPA Journal, Vol. 66 No. 4, pp. 74-5.
Ashton, A.H. (1991), “Experience and error frequency knowledge as potential determinants of
expertise”, The Accounting Review, Vol. 66 No. 2, pp. 218-39.
Barkess, L. and Simnett, R. (1994), “The provision of other services by auditors: independence
and pricing issues”, Accounting & Business Research, Vol. 30, September, pp. 261-89.
Auditor
appointment
139
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
Barlev, B. (1977), “The initial selection of independent public accountants: an empirical
investigation”, The International Journal of Auditing, Vol. 12 No. 2, pp. 37-51.
Beattie, V.A. and Fearnley, S. (1995), “The importance of audit ?rm characteristics and the
drivers of auditor change in UK listed companies”, Accounting & Business Research,
Vol. 25, Autumn, pp. 227-39.
Beattie, V.A. and Fearnley, S. (1998a), “Audit market competition: auditor changes and the
impact of tendering”, British Accounting Review, Vol. 30, pp. 261-89.
Beattie, V.A. and Fearnley, S. (1998b), “Auditor changes and tendering: UK evidence”,
Accounting, Auditing & Accountability Journal, Vol. 11 No. 1, pp. 72-98.
Bedard, J., Coulombe, D. andCourteau, L. (2000), “Demandandsupplyof auditinginIPOs: anempirical
analysis of the Quebec market”, International Journal of Auditing, Vol. 4 No. 3, pp. 227-45.
Beding?eld, J.P. and Loeb, S.E. (1974), “Auditor changes – an examination”, Journal of
Accountancy, March, pp. 66-9.
Behn, B.K., Carcello, J.V., Hermanson, D.R. and Hermanson, R.H. (1997), “The determinants of audit
client satisfactionamongclients of Big6 ?rms”, Accounting Horizons, Vol. 11, March, pp. 7-24.
Bewley, K., Chung, J. and McCracken, S. (2008), “An examination of auditor choice using
evidence from Andersen’s demise”, International Journal of Auditing, Vol. 12, pp. 89-110.
Blouin, J., Grein, B.M. and Rountree, B.R. (2007), “An analysis of forced auditor change: the case
of former Arthur Andersen clients”, The Accounting Review, Vol. 82 No. 3, pp. 621-50.
Boon, K., McKinnon, J. and Ross, P. (2008), “Audit service quality in compulsory audit tendering:
preparer perceptions and satisfaction”, Accounting Research Journal, Vol. 21 No. 2,
pp. 93-122.
Boon, K., Crowe, S., McKinnon, J. and Ross, P. (2005), “Compulsory audit tendering and audit
fees: evidence from Australian local government”, International Journal of Auditing, Vol. 9
No. 3, pp. 221-41.
Buf?ni, F. (2002), “Accountants call for radical audit shake-up”, Australian Financial Review,
Vol. 19, April, p. 1.
Burton, J.C. and Roberts, W. (1967), “A study of auditor changes”, Journal of Accountancy, April,
pp. 31-6.
Casabona, P.A. and Barbera, A.T. (1987), “Survey of procedures for selection of external auditors
by public sector entities”, The Government Accountants Journal, Vol. 36, pp. 23-30.
Chaney, P.K., Jeter, D.C. and Shaw, P.E. (1997), “Client-auditor realignment and restrictions on
auditor solicitation”, The Accounting Review, Vol. 72 No. 3, pp. 433-53.
Chaney, P.K., Jeter, D.C. and Shivakumar, L. (2004), “Self-selection of auditors and audit pricing
in private ?rms”, The Accounting Review, Vol. 79 No. 1, pp. 51-72.
Citron, D.B. and Manalis, G. (2001), “The international ?rms as new entrants to the statutory
audit market: an empirical selection in Greece, 1993 to 1997”, The European Accounting
Review, Vol. 10 No. 3, pp. 439-59.
Commonwealthof Australia (2004, 2006), Corporate LawEconomic ReformProgram–Audit Reform
and Corporate Disclosure (CLERP 9), Commonwealth of Australia, June 2004, July 2006.
Communale, C.L. and Sexton, T.R. (2005), “Mandatory auditor rotation and retention: impact on
market share”, Managerial Auditing Journal, Vol. 20 No. 3, pp. 235-48.
Craswell, A.T., Francis, J.R. and Taylor, S.L. (1995), “Auditor brand name reputations and
industry specialisations”, Journal of Accounting and Economics, Vol. 20 No. 3, pp. 297-322.
Cripps, M. and Ireland, N. (1994), “The design of auctions and tenders with quality thresholds:
the symmetric case”, The Economic Journal, Vol. 104, pp. 316-26.
ARJ
24,2
140
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
DeAngelo, L.E. (1981a), “Auditor independence, ‘lowballing’, and disclosure regulation”, Journal
of Accounting and Economics, Vol. 3 No. 2, pp. 113-27.
DeAngelo, L.E. (1981b), “Auditor size and audit quality”, Journal of Accounting and Economics,
Vol. 3 No. 3, pp. 183-99.
Deloitte, Haskins and Sells (1978), “An opinion survey of the public accounting profession”,
sponsored by Reichman Research, May, pp. 1-54.
De Martinis, M., Moroney, R. and Sudjali, I. (2009), “Extending an analysis of forced auditor
change by former Arthur Andersen clients: following the audit partner versus following
the audit ?rm”, paper presented at the Accounting and Finance Association of Australia
and New Zealand Annual Conference, Adelaide, 4-7 July.
Dillman, D.A. (2000), Mail and Internet Surveys: The Tailored Design Method, Wiley, NewYork, NY.
Eichenseher, J.W. and Shields, D. (1983), “The correlates of CPA-?rm change of publicly-held
corporations”, Auditing: A Journal of Practice & Theory, Vol. 2 No. 2, pp. 23-37.
Field, A. (2000), Discovering Statistics Using SPSS for Windows, Sage, London.
Francis, J.R. and Wilson, E.R. (1988), “Auditor changes: a joint test of theories relating to agency
costs and auditor differentiation”, The Accounting Review, Vol. 63 No. 4, pp. 663-82.
Gabhart, D.R.L. and Miller, G. (1984), “Survey of local governments selection practices”,
Governmental Finance, March, pp. 13-17.
George, W. and Solomon, P. (1980), “Marketing strategies for improving practice development”,
Journal of Accountancy, February, pp. 79-84.
Ghosh, A. and Moon, D. (2005), “Auditor tenure and perceptions of audit quality”, The Accounting
Review, Vol. 80 No. 2, pp. 585-612.
Healy, P. and Lys, T. (1986), “Auditor changes following big eight mergers with non-big eight
audit ?rms”, Journal of Accounting & Public Policy, Vol. 5 No. 4, pp. 251-65.
Hermanson, R.H., Plunkett, L.M. and Turner, D.H. (1994), “A study of the importance of certain
attributes to clients’ initial selections of audit ?rms: a longitudinal and strati?ed
approach”, Journal of Applied Business Research, Vol. 10 No. 1, pp. 101-13.
Herrbach, O. (2001), “Audit quality, auditor behaviour and the psychological contract”,
European Accounting Review, Vol. 10 No. 4, pp. 803-16.
Johnson, R.F. (1993), “The effect of tendering on audit fees and other services”, unpublished MEc
dissertation, University of New England, Armidale.
Lennox, C. (2005), “Audit quality and executive of?cers’ af?liations with CPA ?rms”, Journal of
Accounting and Economics, Vol. 39 No. 2, pp. 201-31.
Lorentzen, G. (1992), “Audit tendering raises vital question of independence”, The Australian
Financial Review, Vol. 3, March, p. 41.
Moizer, P. (1997), “Auditor reputation: the international empirical evidence”, The International
Journal of Auditing, Vol. 1 No. 1, pp. 61-74.
Nagy, A.L. (2005), “Mandatoryaudit ?rmturnover, ?nancial reportingquality, andclient bargaining
power: the case of Arthur Andersen”, Accounting Horizons, Vol. 19 No. 2, pp. 51-68.
NSW Government (1993), The Local Government Act No. 30.
O’Keefe, T.B. and Westort, P.J. (1992), “Conformance to GAAS reporting standards in municipal
audits and the economics of auditing: the effects of audit ?rm size, CPA examination
performance, and competition”, Research in Accounting Regulation, Vol. 6, pp. 39-77.
Pandit, G.M. (1999), “Clients’ perceptions of the incumbent auditors and their loyalty to the audit
?rms: an empirical study”, The Mid-Atlantic Journal of Business, Vol. 35 No. 4, pp. 171-88.
Auditor
appointment
141
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
Petty, R. and Cuganesan, S. (1996), “Auditor rotation: framing the debate”, Australian
Accountant, Vol. 66 No. 4, pp. 40-1.
Richard, C. (2006), “Why an auditor can’t be competent and independent: a French case study”,
European Accounting Review, Vol. 15 No. 2, pp. 153-79.
Rummel, A., Davidson, S. and Acton, D. (1999), “Getting new clients and keeping old ones”,
The CPA Journal, Vol. 69 No. 4, pp. 56-7.
Ryken, K., Radich, R. and Fargher, N. (2007), “Audit partner rotation: evidence of changes in
audit partner tenure as the result of mandatory regulation in Australia”, Current Issues in
Auditing, Vol. 1 No. 1, pp. 28-35.
Sands, J.S. and Huang, A. (2002), “An empirical investigation on voluntary auditor switching:
a two-stage decision process”, Accounting Research Journal, Vol. 15 No. 2, pp. 167-85.
Sands, J.S and McPhail, J. (2003), “Choice criteria of listed Australian public companies for
selecting an auditor: an exploratory study”, International Journal of Business Studies,
Vol. 11 No. 1, pp. 109-33.
Sankaraguruswamy, S. and Whisenant, J. (2004), “An empirical analysis of voluntarily supplied
client-auditor realignment reasons”, Auditing: A Journal of Practice & Theory, Vol. 23
No. 1, pp. 107-21.
Sarbanes-Oxley Act (2002), Public LawNo: 107-204, Government Printing Of?ce, Washington, DC.
Scott, D.R. and van der Walt, N.T. (1994), “Choice criteria in the selection of international
accounting ?rms”, European Journal of Marketing, Vol. 29 No. 1, pp. 27-39.
Stanny, E., Anderson, S. and Nowak, L. (2000), “Contributing factors in the selection and
retention of local accounting ?rms”, National Public Accountant, Vol. 45 No. 4, pp. 19-21.
Vanstraelen, A. (2000), “Impact of renewable long-term audit mandates on audit quality”,
European Accounting Review, Vol. 9 No. 3, pp. 419-42.
Velury, U., Reisch, J.T. andO’Reilly, D.M. (2003), “Institutional ownershipandthe selectionof industry
specialist auditors”, Review of Quantitative Finance and Accounting, Vol. 21 No. 1, pp. 35-48.
Williams, D.D. (1988), “The potential determinants of auditor change”, Journal of Business
Finance & Accounting, Vol. 15 No. 2, pp. 243-61.
Woo, E.-S. and Koh, H.C. (2001), “Factors associated with auditor changes: a Singapore study”,
Accounting & Business Research, Vol. 13 No. 2, pp. 133-44.
(The Appendices follow overleaf.)
About the authors
Kym Butcher is Lecturer in Accounting at the University of Western Sydney.
Graeme Harrison is Professor Emeritus of Accounting and Finance at Macquarie University.
Graeme Harrisonis the correspondingauthor andcanbe contactedat: [email protected]
Philip Ross is Associate Professor and Head of the School of Accounting at University of
Western Sydney.
To purchase reprints of this article please e-mail: [email protected]
Or visit our web site for further details: www.emeraldinsight.com/reprints
ARJ
24,2
142
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
Appendix 1
D
e
m
o
g
r
a
p
h
i
c
C
a
t
e
g
o
r
i
e
s
F
r
e
q
u
e
n
c
y
t
o
t
a
l
(
%
)
(
n
¼
1
2
3
)
F
r
e
q
u
e
n
c
y
r
o
t
a
t
o
r
s
(
%
)
(
n
¼
2
7
)
F
r
e
q
u
e
n
c
y
r
e
t
a
i
n
e
r
s
(
%
)
(
n
¼
9
6
)
L
e
n
g
t
h
o
f
t
i
m
e
i
n
p
o
s
i
t
i
o
n
L
e
s
s
t
h
a
n
3
y
e
a
r
s
4
5
(
3
6
.
6
)
1
0
(
3
7
.
0
)
3
5
(
3
6
.
5
)
4
-
6
y
e
a
r
s
3
0
(
2
4
.
4
)
7
(
2
5
.
9
)
2
3
(
2
4
.
0
)
G
r
e
a
t
e
r
t
h
a
n
6
y
e
a
r
s
4
8
(
3
9
.
0
)
1
0
(
3
7
.
0
)
3
8
(
3
9
.
6
)
A
p
p
r
o
x
i
m
a
t
e
p
o
p
u
l
a
t
i
o
n
o
f
c
o
u
n
c
i
l
’
s
r
e
g
i
o
n
U
p
t
o
5
0
,
0
0
0
r
e
s
i
d
e
n
t
s
8
7
(
7
0
.
7
)
1
7
(
6
3
.
0
)
7
0
(
7
2
.
9
)
5
0
,
0
0
0
-
1
0
0
,
0
0
0
r
e
s
i
d
e
n
t
s
2
2
(
1
7
.
9
)
6
(
2
2
.
2
)
1
6
(
1
6
.
7
)
G
r
e
a
t
e
r
t
h
a
n
1
0
0
,
0
0
0
r
e
s
i
d
e
n
t
s
1
4
(
1
1
.
4
)
4
(
1
4
.
8
)
1
0
(
1
0
.
4
)
A
p
p
r
o
x
i
m
a
t
e
t
o
t
a
l
r
e
v
e
n
u
e
o
f
c
o
u
n
c
i
l
U
p
t
o
$
5
0
m
8
2
(
6
6
.
7
)
1
8
(
6
6
.
7
)
6
4
(
6
6
.
7
)
$
5
0
m
t
o
$
1
0
0
m
2
6
(
2
1
.
1
)
5
(
1
8
.
5
)
2
1
(
2
1
.
9
)
G
r
e
a
t
e
r
t
h
a
n
$
1
0
0
m
1
5
(
1
2
.
2
)
4
(
1
4
.
8
)
1
1
(
1
1
.
5
)
L
o
c
a
t
i
o
n
o
f
c
o
u
n
c
i
l
M
e
t
r
o
p
o
l
i
t
a
n
3
1
(
2
5
.
2
)
8
(
2
9
.
6
)
2
3
(
2
4
.
0
)
N
o
n
-
m
e
t
r
o
p
o
l
i
t
a
n
9
2
(
7
4
.
8
)
1
9
(
7
0
.
4
)
7
3
(
7
6
.
0
)
T
y
p
e
o
f
a
u
d
i
t
?
r
m
o
f
i
n
c
u
m
b
e
n
t
a
u
d
i
t
o
r
B
i
g
N
i
n
t
e
r
n
a
t
i
o
n
a
l
a
u
d
i
t
?
r
m
3
1
(
2
5
.
2
)
8
(
2
9
.
6
)
2
3
(
2
4
.
0
)
N
a
t
i
o
n
a
l
a
u
d
i
t
?
r
m
9
(
7
.
3
)
3
(
1
1
.
1
)
6
(
6
.
2
)
L
a
r
g
e
l
o
c
a
l
o
r
r
e
g
i
o
n
a
l
?
r
m
6
4
(
5
2
.
0
)
1
3
(
4
8
.
1
)
5
1
(
5
3
.
1
)
S
m
a
l
l
l
o
c
a
l
?
r
m
1
9
(
1
5
.
4
)
3
(
1
1
.
1
)
1
6
(
1
6
.
7
)
L
e
n
g
t
h
o
f
i
n
c
u
m
b
e
n
t
a
u
d
i
t
o
r
’
s
t
e
n
u
r
e
O
n
e
t
e
n
d
e
r
p
e
r
i
o
d
7
9
(
6
4
.
2
)
1
7
(
6
3
.
0
)
6
2
(
6
4
.
6
)
T
w
o
t
e
n
d
e
r
p
e
r
i
o
d
s
4
4
(
3
5
.
8
)
1
0
(
3
7
.
0
)
3
4
(
3
5
.
4
)
T
y
p
e
o
f
c
o
u
n
c
i
l
’
s
l
a
s
t
a
u
d
i
t
r
e
p
o
r
t
U
n
m
o
d
i
?
e
d
a
u
d
i
t
r
e
p
o
r
t
1
1
5
(
9
3
.
5
)
2
5
(
9
2
.
6
)
9
0
(
9
3
.
8
)
M
o
d
i
?
e
d
a
u
d
i
t
r
e
p
o
r
t
8
(
6
.
5
)
2
(
7
.
4
)
6
(
6
.
2
)
N
u
m
b
e
r
o
f
b
i
d
s
e
x
p
e
c
t
e
d
t
o
b
e
r
e
c
e
i
v
e
d
i
f
b
i
d
s
w
e
r
e
c
a
l
l
e
d
n
o
w
O
n
e
t
o
t
h
r
e
e
b
i
d
s
3
5
(
2
8
.
5
)
3
(
1
1
.
1
)
3
2
(
3
3
.
3
)
F
o
u
r
t
o
s
i
x
b
i
d
s
7
3
(
5
9
.
3
)
2
2
(
8
1
.
5
)
5
1
(
5
3
.
1
)
G
r
e
a
t
e
r
t
h
a
n
s
i
x
b
i
d
s
1
5
(
1
2
.
2
)
2
(
7
.
4
)
1
3
(
1
3
.
5
)
Table AI.
Demographics of sample
Auditor
appointment
143
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
Appendix 2
T
o
t
a
l
s
a
m
p
l
e
R
o
t
a
t
o
r
s
R
e
t
a
i
n
e
r
s
M
e
a
n
(
m
e
d
i
a
n
)
M
e
a
n
(
m
e
d
i
a
n
)
M
e
a
n
(
m
e
d
i
a
n
)
S
D
S
D
S
D
A
t
t
r
i
b
u
t
e
n
o
.
A
t
t
r
i
b
u
t
e
d
e
s
c
r
i
p
t
i
o
n
a
(
M
i
n
.
-
m
a
x
.
)
(
M
i
n
.
-
m
a
x
.
)
(
M
i
n
.
-
m
a
x
.
)
T
e
s
t
o
f
d
i
f
f
e
r
e
n
c
e
s
o
f
m
e
a
n
s
t
-
s
t
a
t
i
s
t
i
c
(
s
i
g
.
,
t
w
o
-
t
a
i
l
e
d
)
b
(
n
¼
1
2
3
)
(
n
¼
2
7
)
(
n
¼
9
6
)
3
8
T
h
e
o
v
e
r
a
l
l
q
u
a
l
i
t
y
o
f
a
u
d
i
t
s
e
r
v
i
c
e
s
p
r
o
v
i
d
e
d
b
y
t
h
e
a
u
d
i
t
?
r
m
2
.
6
4
(
3
.
0
0
)
2
.
7
8
(
3
.
0
0
)
2
.
6
0
(
3
.
0
0
)
1
.
5
5
9
0
.
5
1
4
0
.
5
0
6
0
.
5
1
3
(
2
0
.
1
2
2
)
(
1
-
3
)
(
1
-
3
)
(
1
-
3
)
3
9
T
h
e
q
u
a
l
i
t
y
o
f
t
h
e
a
u
d
i
t
?
r
m
’
s
a
d
v
i
c
e
t
o
c
o
u
n
c
i
l
m
a
n
a
g
e
m
e
n
t
,
i
n
c
l
u
d
i
n
g
m
a
n
a
g
e
m
e
n
t
l
e
t
t
e
r
s
,
i
n
t
e
r
n
a
l
c
o
n
t
r
o
l
r
e
p
o
r
t
s
2
.
6
3
(
3
.
0
0
)
2
.
7
4
(
3
.
0
0
)
2
.
5
9
(
3
.
0
0
)
1
.
3
0
5
0
.
5
1
8
0
.
4
4
7
0
.
5
3
5
(
2
0
.
1
9
4
)
(
1
-
3
)
(
2
-
3
)
(
1
-
3
)
3
7
T
h
e
a
b
i
l
i
t
y
o
f
t
h
e
a
u
d
i
t
p
a
r
t
n
e
r
(
s
)
t
o
m
e
e
t
d
e
a
d
l
i
n
e
s
2
.
6
0
(
3
.
0
0
)
2
.
8
1
(
3
.
0
0
)
2
.
5
4
(
3
.
0
0
)
1
.
8
7
9
0
.
6
7
4
0
.
3
9
6
0
.
7
2
4
(
0
.
0
6
3
)
*
(
2
1
-
3
)
(
2
-
3
)
(
2
1
-
3
)
2
T
h
e
r
e
p
u
t
a
t
i
o
n
o
f
t
h
e
a
u
d
i
t
?
r
m
i
n
p
r
o
v
i
d
i
n
g
a
u
d
i
t
s
e
r
v
i
c
e
s
t
o
l
o
c
a
l
c
o
u
n
c
i
l
s
2
.
5
3
(
3
.
0
0
)
2
.
6
7
(
3
.
0
0
)
2
.
4
9
(
3
.
0
0
)
1
.
1
7
4
0
.
6
9
3
0
.
5
5
5
0
.
7
2
5
(
2
0
.
2
4
3
)
(
0
-
3
)
(
1
-
3
)
(
0
-
3
)
1
9
T
h
e
i
n
d
e
p
e
n
d
e
n
c
e
o
f
t
h
e
a
u
d
i
t
?
r
m
f
r
o
m
y
o
u
r
c
o
u
n
c
i
l
2
.
4
5
(
3
.
0
0
)
2
.
7
4
(
3
.
0
0
)
2
.
3
6
(
3
.
0
0
)
2
.
0
3
1
0
.
8
6
1
0
.
5
2
6
0
.
9
1
9
(
0
.
0
4
4
)
*
*
(
2
2
-
4
)
(
1
-
3
)
(
2
2
-
4
)
1
T
h
e
o
v
e
r
a
l
l
r
e
p
u
t
a
t
i
o
n
o
f
t
h
e
a
u
d
i
t
?
r
m
2
.
3
7
(
2
.
0
0
)
2
.
7
0
(
3
.
0
0
)
2
.
2
7
(
2
.
0
0
)
2
.
6
3
9
0
.
7
7
1
0
.
4
6
5
0
.
8
1
4
(
0
.
0
0
9
)
*
*
*
(
2
1
-
3
)
(
2
-
3
)
(
2
1
-
3
)
3
0
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
a
u
d
i
t
m
a
n
a
g
e
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
l
o
c
a
l
g
o
v
e
r
n
m
e
n
t
a
u
d
i
t
s
2
.
5
3
(
2
.
0
0
)
2
.
7
8
(
3
.
0
0
)
2
.
2
1
(
2
.
0
0
)
3
.
8
2
5
0
.
7
2
1
0
.
4
2
4
0
.
7
3
9
(
0
.
0
0
0
)
*
*
*
(
2
2
-
3
)
(
2
-
3
)
(
2
2
-
3
)
2
1
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
a
u
d
i
t
e
n
g
a
g
e
m
e
n
t
p
a
r
t
n
e
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
l
o
c
a
l
g
o
v
e
r
n
m
e
n
t
a
u
d
i
t
s
2
.
3
3
(
2
.
0
0
)
2
.
7
0
(
3
.
0
0
)
2
.
2
2
(
2
.
0
0
)
3
.
1
6
0
0
.
7
3
0
0
.
4
6
5
0
.
7
5
7
(
0
.
0
0
2
)
*
*
*
(
2
2
-
3
)
(
2
-
3
)
(
2
2
-
3
)
1
8
T
h
e
a
u
d
i
t
f
e
e
e
s
t
i
m
a
t
e
p
r
o
v
i
d
e
d
b
y
t
h
e
a
u
d
i
t
?
r
m
i
s
c
o
m
m
e
n
s
u
r
a
t
e
w
i
t
h
t
h
e
a
u
d
i
t
w
o
r
k
r
e
q
u
i
r
e
d
2
.
2
4
(
2
.
0
0
)
2
.
4
1
(
3
.
0
0
)
2
.
1
9
(
2
.
0
0
)
1
.
3
9
7
0
.
7
2
5
0
.
7
4
7
0
.
7
1
5
(
2
0
.
1
6
5
)
(
2
1
-
3
)
(
0
-
3
)
(
2
1
-
3
)
(
c
o
n
t
i
n
u
e
d
)
Table AII.
Importance ratings for all
attributes for total
sample, rotators and
retainers, and tests of
mean differences between
rotators and retainers
ARJ
24,2
144
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
T
o
t
a
l
s
a
m
p
l
e
R
o
t
a
t
o
r
s
R
e
t
a
i
n
e
r
s
M
e
a
n
(
m
e
d
i
a
n
)
M
e
a
n
(
m
e
d
i
a
n
)
M
e
a
n
(
m
e
d
i
a
n
)
S
D
S
D
S
D
A
t
t
r
i
b
u
t
e
n
o
.
A
t
t
r
i
b
u
t
e
d
e
s
c
r
i
p
t
i
o
n
a
(
M
i
n
.
-
m
a
x
.
)
(
M
i
n
.
-
m
a
x
.
)
(
M
i
n
.
-
m
a
x
.
)
T
e
s
t
o
f
d
i
f
f
e
r
e
n
c
e
s
o
f
m
e
a
n
s
t
-
s
t
a
t
i
s
t
i
c
(
s
i
g
.
,
t
w
o
-
t
a
i
l
e
d
)
b
(
n
¼
1
2
3
)
(
n
¼
2
7
)
(
n
¼
9
6
)
2
0
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
a
u
d
i
t
e
n
g
a
g
e
m
e
n
t
p
a
r
t
n
e
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
a
u
d
i
t
s
g
e
n
e
r
a
l
l
y
2
.
2
3
(
2
.
0
0
)
2
.
5
6
(
3
.
0
0
)
2
.
1
4
(
2
.
0
0
)
2
.
6
1
9
0
.
7
4
5
0
.
5
0
6
0
.
7
7
7
(
0
.
0
1
0
)
*
*
*
(
0
-
4
)
(
2
-
3
)
(
0
-
4
)
2
7
Q
u
a
l
i
t
y
o
f
w
o
r
k
i
n
g
r
e
l
a
t
i
o
n
s
h
i
p
w
i
t
h
t
h
e
a
u
d
i
t
p
a
r
t
n
e
r
(
s
)
2
.
2
3
(
2
.
0
0
)
2
.
3
3
(
3
.
0
0
)
2
.
2
0
(
2
.
0
0
)
0
.
6
8
0
0
.
9
1
3
0
.
8
3
2
0
.
9
3
6
(
2
0
.
4
9
8
)
(
2
2
-
4
)
(
0
-
3
)
(
2
2
-
4
)
1
3
T
h
e
d
e
t
a
i
l
a
n
d
c
o
m
p
l
e
t
e
n
e
s
s
o
f
t
h
e
p
r
o
p
o
s
e
d
a
u
d
i
t
p
l
a
n
2
.
2
0
(
2
.
0
0
)
2
.
3
3
(
2
.
0
0
)
2
.
1
6
(
2
.
0
0
)
0
.
9
8
4
0
.
8
2
6
0
.
6
2
0
0
.
8
7
5
(
2
0
.
3
2
7
)
(
2
2
-
3
)
(
1
-
3
)
(
2
2
-
3
)
2
8
Q
u
a
l
i
t
y
o
f
w
o
r
k
i
n
g
r
e
l
a
t
i
o
n
s
h
i
p
s
w
i
t
h
t
h
e
a
u
d
i
t
e
n
g
a
g
e
m
e
n
t
s
t
a
f
f
2
.
1
7
(
2
.
0
0
)
2
.
3
3
(
3
.
0
0
)
2
.
1
2
(
2
.
0
0
)
1
.
0
2
9
0
.
9
3
0
0
.
8
3
2
0
.
9
5
4
(
2
0
.
3
0
5
)
(
2
2
-
3
)
(
0
-
3
)
(
2
2
-
3
)
3
6
T
h
e
a
c
c
e
s
s
i
b
i
l
i
t
y
o
f
t
h
e
p
a
r
t
n
e
r
(
s
)
-
i
n
-
c
h
a
r
g
e
o
f
t
h
e
e
n
g
a
g
e
m
e
n
t
2
.
1
7
(
2
.
0
0
)
2
.
5
2
(
3
.
0
0
)
2
.
0
7
(
2
.
0
0
)
2
.
3
0
6
0
.
9
0
3
0
.
7
0
0
0
.
9
3
2
(
0
.
0
2
3
)
*
*
(
2
2
-
3
)
(
1
-
3
)
(
2
2
-
3
)
3
3
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
a
u
d
i
t
t
e
a
m
s
u
p
e
r
v
i
s
o
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
l
o
c
a
l
g
o
v
e
r
n
m
e
n
t
a
u
d
i
t
s
2
.
1
5
(
2
.
0
0
)
2
.
5
2
(
3
.
0
0
)
2
.
0
4
(
2
.
0
0
)
2
.
5
8
8
0
.
8
6
5
0
.
5
8
0
0
.
9
0
5
(
0
.
0
1
1
)
*
*
(
2
2
-
3
)
(
1
-
3
)
(
2
2
-
3
)
2
9
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
a
u
d
i
t
m
a
n
a
g
e
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
a
u
d
i
t
s
g
e
n
e
r
a
l
l
y
2
.
1
5
(
2
.
0
0
)
2
.
4
4
(
2
.
0
0
)
2
.
0
6
(
2
.
0
0
)
2
.
4
4
4
0
.
7
3
2
0
.
5
7
7
0
.
7
5
1
(
0
.
0
1
6
)
*
*
(
0
-
4
)
(
1
-
3
)
(
0
-
4
)
1
0
T
h
e
t
e
c
h
n
i
c
a
l
q
u
a
l
i
?
c
a
t
i
o
n
s
o
f
t
h
e
a
u
d
i
t
e
n
g
a
g
e
m
e
n
t
p
a
r
t
n
e
r
(
s
)
2
.
1
3
(
2
.
0
0
)
2
.
4
4
(
3
.
0
0
)
2
.
0
4
(
2
.
0
0
)
2
.
1
3
8
0
.
8
7
7
0
.
8
4
7
0
.
8
7
0
(
0
.
0
3
5
)
*
*
(
0
-
3
)
(
0
-
3
)
(
0
-
3
)
2
6
T
h
e
a
u
d
i
t
?
r
m
’
s
p
r
o
f
e
s
s
i
o
n
a
l
i
n
d
e
m
n
i
t
y
i
n
s
u
r
a
n
c
e
c
o
m
p
l
i
e
s
w
i
t
h
t
h
e
m
i
n
i
m
u
m
r
e
q
u
i
r
e
m
e
n
t
s
o
f
I
C
A
A
o
r
C
P
A
A
u
s
t
r
a
l
i
a
2
.
1
1
(
2
.
0
0
)
2
.
1
5
(
2
.
0
0
)
2
.
0
9
(
2
.
0
0
)
0
.
2
2
3
1
.
1
1
5
1
.
0
2
7
1
.
1
4
3
(
2
0
.
8
2
4
)
(
2
2
-
3
)
(
0
-
3
)
(
2
2
-
3
)
(
c
o
n
t
i
n
u
e
d
)
Table AII.
Auditor
appointment
145
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
T
o
t
a
l
s
a
m
p
l
e
R
o
t
a
t
o
r
s
R
e
t
a
i
n
e
r
s
M
e
a
n
(
m
e
d
i
a
n
)
M
e
a
n
(
m
e
d
i
a
n
)
M
e
a
n
(
m
e
d
i
a
n
)
S
D
S
D
S
D
A
t
t
r
i
b
u
t
e
n
o
.
A
t
t
r
i
b
u
t
e
d
e
s
c
r
i
p
t
i
o
n
a
(
M
i
n
.
-
m
a
x
.
)
(
M
i
n
.
-
m
a
x
.
)
(
M
i
n
.
-
m
a
x
.
)
T
e
s
t
o
f
d
i
f
f
e
r
e
n
c
e
s
o
f
m
e
a
n
s
t
-
s
t
a
t
i
s
t
i
c
(
s
i
g
.
,
t
w
o
-
t
a
i
l
e
d
)
b
(
n
¼
1
2
3
)
(
n
¼
2
7
)
(
n
¼
9
6
)
6
T
h
e
a
u
d
i
t
?
r
m
i
s
c
o
n
s
i
d
e
r
e
d
t
o
b
e
a
s
p
e
c
i
a
l
i
s
t
i
n
l
o
c
a
l
g
o
v
e
r
n
m
e
n
t
a
u
d
i
t
2
.
1
1
(
2
.
0
0
)
2
.
3
0
(
3
.
0
0
)
2
.
0
5
(
2
.
0
0
)
1
.
0
3
4
1
.
0
8
5
1
.
1
3
7
1
.
0
7
0
(
2
0
.
3
0
3
)
(
2
3
-
3
)
(
2
2
-
3
)
(
2
3
-
3
)
2
5
T
h
e
a
u
d
i
t
?
r
m
i
s
a
c
c
e
p
t
a
b
l
e
t
o
t
h
e
c
o
u
n
c
i
l
’
s
r
e
g
u
l
a
t
o
r
s
2
.
0
9
(
2
.
0
0
)
2
.
1
5
(
2
.
0
0
)
2
.
0
7
(
2
.
0
0
)
0
.
2
9
3
1
.
1
7
4
1
.
1
3
4
1
.
1
9
0
(
2
0
.
7
7
0
)
(
2
3
-
3
)
(
2
1
-
3
)
(
2
3
-
3
)
1
1
T
h
e
t
e
c
h
n
i
c
a
l
q
u
a
l
i
?
c
a
t
i
o
n
s
o
f
t
h
e
a
u
d
i
t
t
e
a
m
m
a
n
a
g
e
r
(
s
)
2
.
0
7
(
2
.
0
0
)
2
.
3
7
(
3
.
0
0
)
1
.
9
8
(
2
.
0
0
)
2
.
1
5
2
0
.
8
4
7
0
.
7
9
2
0
.
8
4
6
(
0
.
0
3
3
)
*
*
(
0
-
3
)
(
0
-
3
)
(
0
-
3
)
1
4
T
h
e
n
a
t
u
r
e
o
f
t
h
e
p
r
o
p
o
s
e
d
a
u
d
i
t
a
p
p
r
o
a
c
h
2
.
0
4
(
2
.
0
0
)
2
.
4
1
(
2
.
0
0
)
1
.
9
4
(
2
.
0
0
)
2
.
4
9
9
0
.
8
4
7
0
.
6
3
6
0
.
9
1
6
(
0
.
0
1
4
)
*
*
(
2
2
-
3
)
(
1
-
3
)
(
2
2
-
3
)
1
7
T
h
e
c
o
m
p
e
t
i
t
i
v
e
n
e
s
s
o
f
t
h
e
p
r
i
c
i
n
g
s
t
r
u
c
t
u
r
e
o
f
t
h
e
a
u
d
i
t
?
r
m
f
o
r
t
h
e
p
r
o
v
i
s
i
o
n
o
f
a
u
d
i
t
s
e
r
v
i
c
e
s
2
.
0
2
(
2
.
0
0
)
2
.
1
1
(
2
.
0
0
)
2
.
0
0
(
2
.
0
0
)
0
.
6
7
7
0
.
7
5
2
0
.
6
4
1
0
.
7
8
1
(
2
0
.
5
0
0
)
(
0
-
3
)
(
1
-
3
)
(
0
-
3
)
1
2
T
h
e
t
e
c
h
n
i
c
a
l
q
u
a
l
i
?
c
a
t
i
o
n
s
o
f
t
h
e
a
u
d
i
t
t
e
a
m
s
u
p
e
r
v
i
s
o
r
(
s
)
1
.
9
7
(
2
.
0
0
)
2
.
3
0
(
2
.
0
0
)
1
.
8
8
(
2
.
0
0
)
2
.
0
8
5
0
.
9
4
0
0
.
7
2
4
0
.
9
7
6
(
0
.
0
3
9
)
*
*
(
2
2
-
3
)
(
0
-
3
)
(
2
2
-
3
)
3
2
T
h
e
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
a
u
d
i
t
t
e
a
m
s
u
p
e
r
v
i
s
o
r
(
s
)
i
n
c
o
n
d
u
c
t
i
n
g
a
u
d
i
t
s
g
e
n
e
r
a
l
l
y
1
.
9
7
(
2
.
0
0
)
2
.
2
2
(
2
.
0
0
)
1
.
9
0
(
2
.
0
0
)
1
.
7
4
1
0
.
8
6
8
0
.
7
5
1
0
.
8
8
8
(
0
.
0
8
4
)
*
(
2
2
-
4
)
(
0
-
3
)
(
2
2
-
4
)
9
T
h
e
r
e
p
u
t
a
t
i
o
n
o
f
t
h
e
a
u
d
i
t
e
n
g
a
g
e
m
e
n
t
p
a
r
t
n
e
r
(
s
)
1
.
8
6
(
2
.
0
0
)
2
.
1
9
(
2
.
0
0
)
1
.
7
7
(
2
.
0
0
)
1
.
8
8
6
1
.
0
1
9
0
.
7
8
6
1
.
0
6
1
(
0
.
0
6
2
)
*
(
2
2
-
3
)
(
0
-
3
)
(
2
2
-
3
)
4
4
D
e
t
a
i
l
s
o
f
o
t
h
e
r
c
o
u
n
c
i
l
s
c
u
r
r
e
n
t
l
y
a
u
d
i
t
e
d
b
y
t
h
e
a
u
d
i
t
?
r
m
1
.
8
0
(
2
.
0
0
)
2
.
0
4
(
2
.
0
0
)
1
.
7
4
(
2
.
0
0
)
1
.
7
5
3
0
.
7
8
6
0
.
7
5
9
0
.
7
8
5
(
0
.
0
8
2
)
*
(
0
-
4
)
(
0
-
3
)
(
0
-
4
)
(
c
o
n
t
i
n
u
e
d
)
Table AII.
ARJ
24,2
146
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
T
o
t
a
l
s
a
m
p
l
e
R
o
t
a
t
o
r
s
R
e
t
a
i
n
e
r
s
M
e
a
n
(
m
e
d
i
a
n
)
M
e
a
n
(
m
e
d
i
a
n
)
M
e
a
n
(
m
e
d
i
a
n
)
S
D
S
D
S
D
A
t
t
r
i
b
u
t
e
n
o
.
A
t
t
r
i
b
u
t
e
d
e
s
c
r
i
p
t
i
o
n
a
(
M
i
n
.
-
m
a
x
.
)
(
M
i
n
.
-
m
a
x
.
)
(
M
i
n
.
-
m
a
x
.
)
T
e
s
t
o
f
d
i
f
f
e
r
e
n
c
e
s
o
f
m
e
a
n
s
t
-
s
t
a
t
i
s
t
i
c
(
s
i
g
.
,
t
w
o
-
t
a
i
l
e
d
)
b
(
n
¼
1
2
3
)
(
n
¼
2
7
)
(
n
¼
9
6
)
2
2
T
h
e
p
r
o
p
o
s
e
d
i
n
v
o
l
v
e
m
e
n
t
o
f
t
h
e
a
u
d
i
t
p
a
r
t
n
e
r
(
s
)
i
n
t
h
e
c
o
n
d
u
c
t
o
f
t
h
e
a
u
d
i
t
i
n
t
e
r
m
s
o
f
e
s
t
i
m
a
t
e
d
a
u
d
i
t
h
o
u
r
s
1
.
8
0
(
2
.
0
0
)
1
.
9
6
(
2
.
0
0
)
1
.
7
5
(
2
.
0
0
)
1
.
0
8
1
0
.
9
0
5
0
.
9
8
0
0
.
8
8
3
(
2
0
.
2
8
2
)
(
2
2
-
4
)
(
2
1
-
3
)
(
2
2
-
4
)
3
1
T
h
e
p
r
o
p
o
s
e
d
i
n
v
o
l
v
e
m
e
n
t
o
f
t
h
e
a
u
d
i
t
m
a
n
a
g
e
r
(
s
)
i
n
t
h
e
c
o
n
d
u
c
t
o
f
t
h
e
a
u
d
i
t
i
n
t
e
r
m
s
o
f
e
s
t
i
m
a
t
e
d
a
u
d
i
t
h
o
u
r
s
1
.
7
6
(
2
.
0
0
)
2
.
0
0
(
2
.
0
0
)
1
.
6
9
(
2
.
0
0
)
1
.
5
0
0
0
.
9
6
1
1
.
0
0
0
0
.
9
4
4
(
2
0
.
1
3
6
)
(
2
2
-
4
)
(
2
1
-
3
)
(
2
2
-
4
)
3
4
T
h
e
p
r
o
p
o
s
e
d
i
n
v
o
l
v
e
m
e
n
t
o
f
t
h
e
a
u
d
i
t
t
e
a
m
s
u
p
e
r
v
i
s
o
r
(
s
)
i
n
t
h
e
c
o
n
d
u
c
t
o
f
t
h
e
a
u
d
i
t
i
n
t
e
r
m
s
o
f
e
s
t
i
m
a
t
e
d
a
u
d
i
t
h
o
u
r
s
1
.
7
6
(
2
.
0
0
)
2
.
0
4
(
2
.
0
0
)
1
.
6
8
(
2
.
0
0
)
1
.
6
3
3
1
.
0
1
9
0
.
8
5
4
1
.
0
5
1
(
2
0
.
1
0
5
)
(
2
3
-
3
)
(
0
-
3
)
(
2
3
-
3
)
4
5
R
e
f
e
r
e
n
c
e
s
f
r
o
m
s
e
n
i
o
r
N
S
W
l
o
c
a
l
c
o
u
n
c
i
l
r
e
p
r
e
s
e
n
t
a
t
i
v
e
s
t
h
a
t
h
a
v
e
e
x
p
e
r
i
e
n
c
e
w
i
t
h
t
h
e
a
u
d
i
t
?
r
m
1
.
7
3
(
2
.
0
0
)
1
.
8
9
(
2
.
0
0
)
1
.
6
9
(
2
.
0
0
)
0
.
9
0
9
1
.
0
1
7
1
.
0
1
3
1
.
0
1
9
(
2
0
.
3
6
5
)
(
2
2
-
4
)
(
0
-
4
)
(
2
2
-
4
)
1
6
T
h
e
p
r
o
p
o
s
e
d
t
i
m
i
n
g
o
f
a
u
d
i
t
w
o
r
k
i
n
t
e
r
m
s
o
f
t
h
e
n
u
m
b
e
r
,
d
u
r
a
t
i
o
n
a
n
d
a
p
p
r
o
x
i
m
a
t
e
d
a
t
e
o
f
v
i
s
i
t
s
b
y
t
h
e
a
u
d
i
t
?
r
m
1
.
7
3
(
2
.
0
0
)
1
.
8
1
(
2
.
0
0
)
1
.
7
1
(
2
.
0
0
)
0
.
4
6
1
1
.
0
5
6
1
.
1
4
5
1
.
0
3
5
(
2
0
.
6
4
5
)
(
2
2
-
3
)
(
2
2
-
3
)
(
2
2
-
3
)
2
4
T
h
e
a
u
d
i
t
?
r
m
i
s
n
o
t
i
n
v
o
l
v
e
d
i
n
e
m
b
a
r
r
a
s
s
i
n
g
l
i
t
i
g
a
t
i
o
n
1
.
7
2
(
2
.
0
0
)
2
.
2
2
(
3
.
0
0
)
1
.
5
8
(
2
.
0
0
)
2
.
2
2
6
1
.
3
3
9
1
.
0
8
6
1
.
3
7
4
(
0
.
0
2
8
)
*
*
(
2
3
-
4
)
(
0
-
3
)
(
2
3
-
4
)
4
3
T
h
e
q
u
a
l
i
t
y
o
f
t
h
e
a
u
d
i
t
?
r
m
’
s
o
r
a
l
p
r
e
s
e
n
t
a
t
i
o
n
1
.
6
7
(
2
.
0
0
)
1
.
9
3
(
2
.
0
0
)
1
.
6
0
(
2
.
0
0
)
1
.
4
5
4
1
.
0
2
0
1
.
0
7
2
1
.
0
0
0
(
2
0
.
1
4
8
)
(
2
1
-
4
)
(
2
1
-
4
)
(
2
1
-
4
)
4
2
T
h
e
q
u
a
l
i
t
y
o
f
t
h
e
a
u
d
i
t
?
r
m
’
s
w
r
i
t
t
e
n
t
e
n
d
e
r
p
r
o
p
o
s
a
l
1
.
6
4
(
2
.
0
0
)
1
.
8
1
(
2
.
0
0
)
1
.
5
9
(
2
.
0
0
)
1
.
0
8
8
0
.
9
3
3
0
.
8
3
4
0
.
9
5
8
(
2
0
.
2
7
9
)
(
2
2
-
3
)
(
0
-
3
)
(
2
2
-
3
)
1
5
T
h
e
p
r
o
p
o
s
e
d
n
u
m
b
e
r
o
f
h
o
u
r
s
t
o
c
o
n
d
u
c
t
t
h
e
a
u
d
i
t
(
f
r
o
m
t
h
e
b
e
g
i
n
n
i
n
g
o
f
?
e
l
d
w
o
r
k
t
o
t
h
e
a
u
d
i
t
r
e
p
o
r
t
d
a
t
e
)
1
.
6
2
(
2
.
0
0
)
2
.
0
7
(
2
.
0
0
)
1
.
4
9
(
2
.
0
0
)
2
.
1
7
7
1
.
2
5
1
1
.
2
0
7
1
.
2
4
0
(
0
.
0
3
1
)
*
*
(
2
3
-
3
)
(
2
2
-
3
)
(
2
3
-
3
)
(
c
o
n
t
i
n
u
e
d
)
Table AII.
Auditor
appointment
147
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
T
o
t
a
l
s
a
m
p
l
e
R
o
t
a
t
o
r
s
R
e
t
a
i
n
e
r
s
M
e
a
n
(
m
e
d
i
a
n
)
M
e
a
n
(
m
e
d
i
a
n
)
M
e
a
n
(
m
e
d
i
a
n
)
S
D
S
D
S
D
A
t
t
r
i
b
u
t
e
n
o
.
A
t
t
r
i
b
u
t
e
d
e
s
c
r
i
p
t
i
o
n
a
(
M
i
n
.
-
m
a
x
.
)
(
M
i
n
.
-
m
a
x
.
)
(
M
i
n
.
-
m
a
x
.
)
T
e
s
t
o
f
d
i
f
f
e
r
e
n
c
e
s
o
f
m
e
a
n
s
t
-
s
t
a
t
i
s
t
i
c
(
s
i
g
.
,
t
w
o
-
t
a
i
l
e
d
)
b
(
n
¼
1
2
3
)
(
n
¼
2
7
)
(
n
¼
9
6
)
2
3
T
h
e
c
o
m
p
u
t
e
r
a
u
d
i
t
c
a
p
a
b
i
l
i
t
y
o
f
t
h
e
a
u
d
i
t
?
r
m
1
.
5
6
(
2
.
0
0
)
1
.
8
5
(
2
.
0
0
)
1
.
4
8
(
2
.
0
0
)
1
.
7
0
8
1
.
0
0
9
0
.
9
4
9
1
.
0
1
5
(
2
0
.
0
9
0
)
(
2
2
-
3
)
(
0
-
3
)
(
2
2
-
3
)
4
8
R
e
f
e
r
e
n
c
e
s
f
r
o
m
m
a
j
o
r
a
u
d
i
t
c
l
i
e
n
t
s
o
f
t
h
e
a
u
d
i
t
?
r
m
1
.
5
1
(
2
.
0
0
)
1
.
9
6
(
2
.
0
0
)
1
.
3
9
(
2
.
0
0
)
2
.
6
8
8
1
.
0
1
1
0
.
8
9
8
1
.
0
0
9
(
0
.
0
0
8
)
*
*
*
(
2
2
-
4
)
(
0
-
4
)
(
2
2
-
4
)
3
T
h
e
c
a
p
a
b
i
l
i
t
y
o
f
t
h
e
a
u
d
i
t
?
r
m
t
o
p
r
o
v
i
d
e
n
o
n
-
a
u
d
i
t
s
e
r
v
i
c
e
s
s
u
c
h
a
s
o
p
e
r
a
t
i
o
n
a
l
a
u
d
i
t
s
a
n
d
/
o
r
c
o
n
s
u
l
t
i
n
g
s
e
r
v
i
c
e
s
1
.
4
3
(
2
.
0
0
)
1
.
5
2
(
2
.
0
0
)
1
.
4
1
(
1
.
5
0
)
0
.
4
1
8
1
.
2
2
9
1
.
1
2
2
1
.
2
6
1
(
2
0
.
6
7
7
)
(
2
2
-
3
)
(
2
2
-
3
)
(
2
2
-
3
)
4
7
D
e
t
a
i
l
s
o
f
m
a
j
o
r
a
u
d
i
t
c
l
i
e
n
t
s
o
f
t
h
e
a
u
d
i
t
?
r
m
1
.
1
8
(
1
.
0
0
)
1
.
4
8
(
2
.
0
0
)
1
.
0
9
(
1
.
0
0
)
1
.
5
8
3
1
.
1
3
1
0
.
8
0
2
1
.
1
9
7
(
2
0
.
1
1
6
)
(
2
2
-
4
)
(
0
-
3
)
(
2
2
-
4
)
8
P
r
e
v
i
o
u
s
e
x
p
e
r
i
e
n
c
e
o
f
t
h
e
a
u
d
i
t
?
r
m
w
i
t
h
y
o
u
r
c
o
u
n
c
i
l
a
s
a
n
i
n
c
u
m
b
e
n
t
a
u
d
i
t
o
r
0
.
9
7
(
1
.
0
0
)
0
.
4
4
(
0
.
0
0
)
1
.
1
1
(
1
.
0
0
)
2
2
.
0
0
0
1
.
5
5
7
1
.
4
2
3
1
.
5
6
9
(
0
.
0
4
8
)
*
*
(
2
3
-
4
)
(
2
3
-
3
)
(
2
3
-
4
)
4
6
T
h
e
p
e
r
s
o
n
a
l
r
e
l
a
t
i
o
n
s
h
i
p
s
e
s
t
a
b
l
i
s
h
e
d
b
e
t
w
e
e
n
t
h
e
a
u
d
i
t
?
r
m
’
s
k
e
y
p
e
o
p
l
e
a
n
d
c
o
u
n
c
i
l
m
a
n
a
g
e
m
e
n
t
d
u
r
i
n
g
t
h
e
c
o
u
r
s
e
o
f
t
h
e
t
e
n
d
e
r
p
r
o
p
o
s
a
l
p
r
o
c
e
s
s
0
.
7
2
(
1
.
0
0
)
1
.
1
5
(
1
.
0
0
)
0
.
6
0
(
1
.
0
0
)
1
.
3
9
7
1
.
7
9
4
1
.
7
2
5
1
.
8
0
3
(
2
0
.
1
6
5
)
(
2
3
-
4
)
(
2
3
-
3
)
(
2
3
-
4
)
7
T
h
e
a
u
d
i
t
?
r
m
h
a
s
a
n
o
f
?
c
e
i
n
c
l
o
s
e
p
r
o
x
i
m
i
t
y
t
o
t
h
e
c
o
u
n
c
i
l
0
.
6
3
(
1
.
0
0
)
0
.
5
2
(
0
.
0
0
)
0
.
6
7
(
1
.
0
0
)
2
0
.
4
2
5
1
.
5
9
5
1
.
1
5
6
1
.
7
0
2
(
2
0
.
6
7
2
)
(
2
3
-
4
)
(
2
1
-
3
)
(
2
3
-
4
)
3
5
B
e
l
i
e
f
t
h
a
t
t
h
e
a
u
d
i
t
?
r
m
w
i
l
l
g
i
v
e
t
h
e
c
o
u
n
c
i
l
a
n
u
n
q
u
a
l
i
?
e
d
a
u
d
i
t
r
e
p
o
r
t
0
.
4
8
(
0
.
0
0
)
0
.
9
6
(
0
.
0
0
)
0
.
3
4
(
0
.
0
0
)
1
.
3
7
6
2
.
0
7
4
1
.
7
8
6
2
.
1
3
7
(
2
0
.
1
7
1
)
(
2
3
-
4
)
(
2
3
-
4
)
(
2
3
-
4
)
4
0
T
h
e
a
u
d
i
t
?
r
m
i
s
a
l
a
r
g
e
l
o
c
a
l
o
r
r
e
g
i
o
n
a
l
a
u
d
i
t
?
r
m
0
.
2
7
(
0
.
0
0
)
0
.
8
1
(
1
.
0
0
)
0
.
1
1
(
0
.
0
0
)
2
.
2
5
5
1
.
4
4
9
1
.
1
7
8
1
.
4
8
6
(
0
.
0
2
6
)
*
*
(
2
3
-
4
)
(
2
2
-
3
)
(
2
3
-
4
)
(
c
o
n
t
i
n
u
e
d
)
Table AII.
ARJ
24,2
148
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
T
o
t
a
l
s
a
m
p
l
e
R
o
t
a
t
o
r
s
R
e
t
a
i
n
e
r
s
M
e
a
n
(
m
e
d
i
a
n
)
M
e
a
n
(
m
e
d
i
a
n
)
M
e
a
n
(
m
e
d
i
a
n
)
S
D
S
D
S
D
A
t
t
r
i
b
u
t
e
n
o
.
A
t
t
r
i
b
u
t
e
d
e
s
c
r
i
p
t
i
o
n
a
(
M
i
n
.
-
m
a
x
.
)
(
M
i
n
.
-
m
a
x
.
)
(
M
i
n
.
-
m
a
x
.
)
T
e
s
t
o
f
d
i
f
f
e
r
e
n
c
e
s
o
f
m
e
a
n
s
t
-
s
t
a
t
i
s
t
i
c
(
s
i
g
.
,
t
w
o
-
t
a
i
l
e
d
)
b
(
n
¼
1
2
3
)
(
n
¼
2
7
)
(
n
¼
9
6
)
4
1
T
h
e
a
u
d
i
t
?
r
m
i
s
a
s
m
a
l
l
l
o
c
a
l
a
u
d
i
t
?
r
m
2
0
.
2
4
(
0
.
0
0
)
0
.
0
7
(
0
.
0
0
)
0
.
3
2
(
0
.
0
0
)
1
.
3
1
9
1
.
3
8
5
1
.
2
3
8
1
.
4
1
8
(
2
0
.
1
9
0
)
(
2
3
-
4
)
(
2
2
-
4
)
(
2
3
-
4
)
5
T
h
e
a
u
d
i
t
?
r
m
i
s
a
s
m
a
l
l
i
n
t
e
r
n
a
t
i
o
n
a
l
o
r
n
a
t
i
o
n
a
l
a
u
d
i
t
?
r
m
2
0
.
7
1
(
0
.
0
0
)
0
.
0
0
(
0
.
0
0
)
2
0
.
9
1
(
2
1
.
0
0
)
2
.
7
3
4
1
.
5
6
1
1
.
2
7
1
1
.
5
8
3
(
0
.
0
0
7
)
*
*
*
(
2
3
-
4
)
(
2
2
-
3
)
(
2
3
-
4
)
4
T
h
e
a
u
d
i
t
?
r
m
i
s
a
B
i
g
4
i
n
t
e
r
n
a
t
i
o
n
a
l
a
u
d
i
t
?
r
m
2
0
.
7
6
(
0
.
0
0
)
2
0
.
3
3
(
0
.
0
0
)
2
0
.
8
8
(
2
1
.
0
0
)
1
.
6
1
0
1
.
5
5
4
1
.
2
0
9
1
.
6
2
4
(
2
0
.
1
1
0
)
(
2
3
-
4
)
(
2
3
-
1
)
(
2
3
-
4
)
N
o
t
e
s
:
G
e
n
e
r
i
c
q
u
e
s
t
i
o
n
i
s
t
h
e
“
i
m
p
o
r
t
a
n
c
e
o
f
t
h
i
s
a
t
t
r
i
b
u
t
e
i
n
y
o
u
r
a
u
d
i
t
o
r
a
p
p
o
i
n
t
m
e
n
t
d
e
c
i
s
i
o
n
”
;
r
e
s
p
o
n
s
e
s
c
a
l
e
i
s
2
3
(
v
e
r
y
u
n
i
m
p
o
r
t
a
n
t
)
,
2
2
(
u
n
i
m
p
o
r
t
a
n
t
)
,
2
1
(
s
o
m
e
w
h
a
t
u
n
i
m
p
o
r
t
a
n
t
)
,
0
(
n
e
u
t
r
a
l
)
,
1
(
s
o
m
e
w
h
a
t
i
m
p
o
r
t
a
n
t
)
,
2
(
i
m
p
o
r
t
a
n
t
)
,
3
(
v
e
r
y
i
m
p
o
r
t
a
n
t
)
,
n
o
t
a
p
p
l
i
c
a
b
l
e
;
a
a
t
t
r
i
b
u
t
e
s
a
r
e
r
a
n
k
e
d
i
n
d
e
c
r
e
a
s
i
n
g
o
r
d
e
r
o
f
i
m
p
o
r
t
a
n
c
e
f
o
r
t
h
e
t
o
t
a
l
s
a
m
p
l
e
;
b
a
p
o
s
i
t
i
v
e
(
n
e
g
a
t
i
v
e
)
t
-
s
t
a
t
i
s
t
i
c
t
h
a
t
i
s
s
i
g
n
i
?
c
a
n
t
(
p
,
0
.
1
0
,
t
w
o
-
t
a
i
l
e
d
)
i
n
d
i
c
a
t
e
s
t
h
a
t
t
h
e
v
a
r
i
a
b
l
e
i
s
m
o
r
e
i
m
p
o
r
t
a
n
t
t
o
r
o
t
a
t
o
r
s
(
r
e
t
a
i
n
e
r
s
)
Table AII.
Auditor
appointment
149
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)
This article has been cited by:
1. Peter John Carey, Gary S. Monroe, Greg Shailer. 2014. Review of Post-CLERP 9 Australian
Auditor Independence Research. Australian Accounting Review 24:10.1111/auar.2014.24.issue-4, 370-380.
[CrossRef]
2. Kym Butcher, Graeme Harrison, Philip Ross. 2013. Perceptions of Audit Service Quality and Auditor
Retention. International Journal of Auditing 17:10.1111/ijau.2013.17.issue-1, 54-74. [CrossRef]
D
o
w
n
l
o
a
d
e
d

b
y

P
O
N
D
I
C
H
E
R
R
Y

U
N
I
V
E
R
S
I
T
Y

A
t

2
1
:
1
3

2
4

J
a
n
u
a
r
y

2
0
1
6

(
P
T
)

doc_854650773.pdf