Predicting Auditor Changes with Qualified Audit Opinions Using Logit Analysis: Revisited

Abstract

Our study revisits the qualified audit opinion factor in predicting auditor changes using logit analysis. The empirical test results of logit analysis in the prediction model of auditor change study with qualified audit opinions show that the prediction study performs reasonably well using financial and other data from the Form 10-K report. Even though several data mining approaches have been used recently, the prediction rates are similar to the logit models. The qualified audit opinion variable is significant from this analysis. These results imply that the qualified audit opinions with financial distress factors add significant information value in predicting auditor change.