Former Audit Partners on Audit Committees: Implications for Russian Corporate Governance

Genevieve Scalan


The Moscow Exchange in conjunction with the Organization for Economic Cooperation and Development (OECD) continues to address improvements in Russian corporate governance by conducting annual roundtables (OECD, 2017).  My research relates to corporate governance provided by audit committees. I examine relationships between former audit partner (FAP) audit committee members and auditors, via a network similar to the interlocking directorate.  Using a dataset of U.S. auditor dismissals, I construct unique network variables measuring the relational ties between FAP audit committees and auditors.  I find some evidence suggesting ties created by former audit partners may increase auditor switching possibly indicating impaired auditor independence.

This outcome suggests implications for Russian corporate governance because it is likely Russian Boards of Directors would experience similar circumstances as their U.S. counterparts.  As the Moscow Exchange continues its partnership with the OECD to improve corporate governance, audit quality and auditor independence should be considered in the dialogue.


Corporate Governance, Audit Committee; Former Audit Partners


Bank of Russia. 2014. Corporate governance code. Official Journal of the Bank of Russia. Retrieved March 16, 2017 from

Blouin, J., B. Grein and B. Rountree. 2007. Analysis of forced auditor change: the case of former Arthur Andersen clients. The Accounting Review. 82:621-650.

Blue Ribbon Committee (BRC). 1999. Report and recommendations of the Blue Ribbon Committee on improving the effectiveness of corporate audit committees. Business Lawyer 54: 1067–96.

Carcello, J.V., and T.L. Neal. 2003. Audit committee characteristics and auditor dismissals following “new” going-concern reports. The Accounting Review. 78:95-117.

Chen, K.Y., and J. Zhou. 2007. Audit committee, board characteristics, and auditor switch decisions by Andersen’s clients. Contemporary Accounting Research. 24:1085-1117.

Chow, C.W. and S.J. Rice. 1982. Qualified audit opinions and auditor switching. The Accounting Review. 57:326-335.Cohen, J., P. Cohen, S. West, and L. Aiken. 2003. Applied Multiple Regression/Correlation Analysis. Malwah, NJ: Lawrence Erlbaum Associates.

Cohen, J., P. Cohen, S. West, and L. Aiken. 2003. Applied Multiple Regression/Correlation Analysis for the Behavioral Sciences. Mahwah, NJ. Lawrence Erlbaum Associates, Publishers.

Courtney, N.P., C.A. Jubb. 2005. Attachments between directors and auditors: do they affect engagement tenure? Ethics and Auditing. Canberra, Australia. Australian National University Press.

Davison, A.G., B.W. Stening, and W.T. Wai. 1984. Auditor concentration and the impact of interlocking directorates. Journal of Accounting Research. 22:313-317.

Ettredge, M.L., C. Li, and S. Scholz. 2007. Audit fees and auditor dismissals in the Sarbanes-Oxley era. Accounting Horizons. 21:371-386.

Hennes, K. M., Leone, A. J., & Miller, B. P. 2013. Determinants and market consequences of auditor dismissals after accounting restatements. The Accounting Review. 89: 1051-1082.

Hogan, C.E. and D.C. Jeter. 1999 Industry specialization by auditors. Auditing a Journal of Practice and Theory. 18:1-17.

Iwasaki, I. 2014. What determines audit independence and expertise in Russia? firm-level evidence. Corporate Ownership and Control. 11: 81-107.

Klein, A. 2002. Economic determinants of audit committee independence. The Accounting Review. 77:435-452.

Landsman, W., K. K. Nelson and B. Rountree. 2009. Auditor switches in the pre- and post- Enron eras: risk or realignment. The Accounting Review. 84:531-558.

Larcker, D. F. and B.Tayan. 2010. Director networks: Good for the director, good for the shareholder. Closer Look Series: Topics, issues, and Controversies in Corporate Governance – Graduate School of Business Stanford University.

Lennox, C. S. 2005. Audit quality and executive officer’ affiliations with CPA firms. Journal of Accounting and Economics. 39: 201-231.

Lennox, C. S. and C. W. Park. 2007. Audit Firm Appointments, Audit Firm Alumni, and Audit Committee Independence. Contemporary Accounting Research. 24:235-58.

Menon, K. and D.D. Williams. 2004. Former audit partners and abnormal accruals. The Accounting Review. 79:1095-1118.

Mizruchi, M. 1996. What do interlocks do? An analysis, critique, and assessment of research on interlocking directorates. Annual Review of Sociology. 22:271-298.

Moscow Exchange. 2015. Moscow Exchange IPO Guide Retrieved March 16, 2017 from

Organisation for Economic Cooperation and Development. 2017. Corporate governance in Russia. Retrieved March 16, 2017 from

Naiker, V. and D.S. Sharma. 2009. Former audit partners on the audit committee and internal control deficiencies. The Accounting Review. 84:559-587.

Schwartz, K.B., and K. Menon. 1985. Auditor switches by failing firms. The Accounting Review. 60:248-261.

Shu, S. Z. 2000. Auditor resignations: Clientele effects and legal liability. Journal of Accounting and Economics. 29:173-702.

Shumway, T. 2001. Forecasting bankruptcy more accurately: A simple hazard model. The Journal of Business. 74: 101-124.

Sucher, P., & Bychkova, S. 2001. Auditor independence in economies in transition: a study of Russia. European Accounting Review. 10: 817-841.

Tremblay, M.-S., and Y. Gendron. 2010. Governance prescriptions under trial: On the interplay between the logics of resistance and compliance in audit committees. Critical Perspective on Accounting. 22:259-272.

United States Government Printing Office. 2002. Public Law 107-204 – Sarbanes Oxley Act of 2002. Retrieved September 26, 2009 from

Useem, M. 1984. The Inner Circle. New York, NY, Oxford University Press.

Vafeas, N. 2006. Audit committees, boards and the quality of reported earnings. Contemporary Accounting Research. 22: 1093-1122.

Full Text: Article.PDF


  • There are currently no refbacks.

Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.

The IEECA Press

ISSN 2328-8272 (print)   ISSN 2328-8280 (online)