What is Auditor Switching? - Navigasi Berita a -->
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What is Auditor Switching?

Navigasi - Auditor switching is an act of the company or client in making changes that aim to maintain the independence of the auditor in order to remain objective in auditing the client's financial statements.

What is Auditor Switching?
What is Auditor Switching?

According to Wijayanti (2010), mandatory (mandatory) and voluntary (voluntary) auditor replacement can be distinguished on the basis of which party is the focus of attention on the issue. If the change occurs voluntarily, then the main focus of attention is on the client side. On the other hand, if the change occurs on a mandatory basis, the main focus of attention shifts to the auditor.

Thus, the focus of the researcher's attention is on the client company. The indicator to measure auditor switching in this study is to use a dummy variable where companies that perform auditor switching are given a value of 1 and if they do not perform auditor switching are given a value of 0.

According to Randa J. Elder, Mark S. Beasly, Alvin A. Arens and Amir Abadi (2011:81) define auditor turnover as follows:

“Auditor changes, research in the field of auditing indicates a variety of reasons for which management may decide to change auditors. These reasons include seeking better quality service, opinion shopping, and reducing costs. The decision to change auditors in order to gain access to better services. By itself will not threaten the independence of the auditor. The best protection for auditors against the threat of independence that arises from this auditor change is communication.

According to Mulyadi (2017: 90) that auditor turnover is:

“Clients who change their auditors for no apparent reason, may be caused by client dissatisfaction with the services provided by the old auditor. However, often the change in auditors is caused by a dispute between the client and the public auditor regarding the presentation of financial statements and disclosures. New clients who have changed their auditors are clients who are at great risk for their replacement auditors.

Some of the definitions above regarding auditor switching can be concluded that auditor switching or auditor switching is an act of the company to take a decision in the change of auditor services where the decision making is to improve better quality because independence must always be maintained and maintained. Changes in auditors in the company are divided into 2, namely mandatory (mandatory) and voluntary (voluntary). Measurements using a dummy.