Auditor Rotation in Public Limited Companies in Cameroon: Determinants and Effect on Audit Quality

Abstract

This paper examines the determinants of auditor rotation and its subsequent effect on audit quality in Public limited companies in Cameroon. Companies having auditors in Cameroon, are mandated by OHADA (2014) regulations to rotate auditors after six years of continuous service. In light of this, this paper employs a mixed approach. Quantitative analysis of 129 companies' loan application files that were submitted to commercial banks, employing binary logistic regression, revealed that the situation of net results and the auditor's opinion negatively influence auditor rotation. Results also indicate that changes in indebtedness levels and indebtedness exert positive influence. Furthermore, the quality of audits was found to be adversely influenced by the rotation of auditors. A thematic content analysis of qualitative data collected from four interviews with auditors showed that mandatory auditor rotation is not always followed in Cameroon. It has different effects on audit quality depending on how it is implemented. These findings suggest that regulators should carefully evaluate policies to enhance auditor rotation practices, thereby safeguarding auditor independence and improving audit quality.