Auditor changes and audit satisfaction: Client perceptions in the Sarbanes-Oxley era of legislative restrictions and involuntary auditor change

• Published in: Critical perspectives on accounting Vol. 19; no. 7; pp. 931 - 951
• Main Authors: Daugherty, Brian E., Tervo, Wayne A.
• Format: Journal Article
• Language: English
• Published: London Elsevier Ltd 01-11-2008; Elsevier BV
• Subjects: Accountants; Accounting firms; Auditing; Auditor change; Auditor changes; Auditor satisfaction; Business management; Client satisfaction; Customer satisfaction; Executives; Legislation; Perception; Public Company Accounting Reform & Investor Protection Act 2002-US; Sarbanes-Oxley; Satisfaction; Statistical analysis; Studies; United States > US; Auditor satisfaction; Auditor change; Client satisfaction; Sarbanes-Oxley
• ISSN: 1045-2354; 1095-9955
• DOI: 10.1016/j.cpa.2005.09.003

This study investigates responding executives’ reported levels of satisfaction with their current, and where applicable, predecessor independent auditor. This research is conducted during the period following the demise of Arthur Andersen and the implementation of sweeping changes set forth by Sarbanes-Oxley. We survey Audit Committee chairpersons, CEOs, and CFOs of the S&P 500.
We find significant differences in perceived levels of satisfaction with their current independent auditor between executives who have experienced a recent change in independent auditors and those not experiencing a recent change, though we find no significant difference in the perceived value for fees provided by the independent auditor between the two groups. For respondents experiencing a recent auditor change, our findings suggest a lower perception of value for fees with the successor auditor than with the predecessor, though we find no differences in perceived level of professional services satisfaction between the successor and predecessor auditor.