Journal of Management & Governance

, Volume 20, Issue 3, pp 485–502 | Cite as

Audit committee perspectives on mandatory audit firm rotation: evidence from Canada

  • Richard FontaineEmail author
  • Hanen Khemakhem
  • David N. Herda


This study examines audit committee (AC) members’ perspectives on mandatory audit firm rotation (MAFR), mandatory audit partner rotation, ways in which ACs monitor auditor independence and objectivity, and the costs associated with switching audit firms. In-person interviews with AC members in Canada were conducted to improve our understanding of the reasons underlying AC members’ positions on MAFR. All AC members interviewed in this study were adamantly opposed to MAFR. MAFR was perceived as a threat to their shareholder-granted authority to make audit firm appointment decisions. Participants believe that their professional judgment and observations are the most effective means of ensuring auditor independence and view MAFR as an unnecessary intervention. We explain these results using self-determination theory. Our findings were also used to develop a conceptual model of AC relationships with external auditors and financial management.


Mandatory audit firm rotation Audit committees Auditor independence Self-determination theory Canada 



We thank Roberto Di Pietra (editor), our interview participants, and the two anonymous reviewers for their helpful comments and suggestions. We are also grateful for the generous support provided by the Corporate Reporting Chair of the Accounting Department at the University of Quebec at Montreal. We would like to dedicate this article to our colleague and dear friend, Glenn Rioux. Thank you for your help Glenn, you will be truly missed.


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Copyright information

© Springer Science+Business Media New York 2015

Authors and Affiliations

  • Richard Fontaine
    • 1
    Email author
  • Hanen Khemakhem
    • 1
  • David N. Herda
    • 2
  1. 1.Department of AccountingESG-UQAMMontrealCanada
  2. 2.College of BusinessNorth Dakota State UniversityFargoUSA

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