DETERMINANTS OF CONTINUITY IN CONTRACTING THE AUDIT ON A VOLUNTARY BASIS: EVIDENCE FOR THE CASE

Abstract

In the European Union there is currently an intense debate regarding the regulation of auditing of accounts. One of the most relevant and controversial issues is the definition of the size of the companies required to be audited. This work is focused on the study of voluntary contracting of the audit service. Specifically, the factors that determine the continuity of the client when it is no longer obliged to be audited are examined. As a research methodology, a survey was carried out with 275 SMEs in Spain. The results obtained show that the perception of improvement in the quality of financial information and in the control of internal accounting records is the main factor that contributes to continuing to voluntarily contract the service . Furthermore, such continuity is more likely in companies that are already audited voluntarily, in those audited by international firms and in those that maintain a lesser relationship with credit institutions and other lenders.