The impact of auditor‐client relationships on the reversal of first‐time audit qualifications

Michael J. Meyer (Ohio University, Athens, Ohio, USA)
John T. Rigsby (Mississippi State University, Mississippi, USA)
Jeff Boone (Accounting Department, College of Business, University of Texas at San Antonio, San Antonio, Texas, USA)

Managerial Auditing Journal

ISSN: 0268-6902

Publication date: 1 January 2007



To examine whether auditor‐client relationships have an effect on the decision by an auditor to remove an audit qualification.


The paper tracks the event history of a sample of firms from the issuance of a first time audit qualification for going concern and non‐going concern contingencies (initial qualification issued between 1983 and 1987, all pre Statement of Auditing Standard (SAS) 58) to the issuance of a clean opinion (up through 1995 when SAS 79 was issued). Attachment theory provides a theoretical framework for the variables analyzed and discrete time survival analysis is used as the statistical method in the analysis so as to evaluate each company year from the initial unclean opinion to the year a clean opinion is issued.


It is found that interpersonal and interorganizational attachment has a significant impact on those opinion decisions that require more auditor judgment (i.e. going concern).


This study examines the linkage between auditor tenure and audit quality in a broader context than has been examined to date. Using attachment theory for the foundation, auditor tenure can be viewed as but one measure of the attachment between auditors and clients. In this study, a number of measures of both interpersonal and interorganizational attachment between auditors and clients are included. Further, auditor opinion judgments are examined as a determinant of auditor quality. Finally, discrete‐time survival analysis is employed which allows the tracking of the entire event history from initial qualification to removal of the qualification, something not possible with most standard statistical techniques.



Meyer, M., Rigsby, J. and Boone, J. (2007), "The impact of auditor‐client relationships on the reversal of first‐time audit qualifications", Managerial Auditing Journal, Vol. 22 No. 1, pp. 53-79.

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Copyright © 2007, Emerald Group Publishing Limited

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