Auditor tenure as a (control) variable

When doing research on companies one of the variables that could be interesting to take into account when analyzing company data is the tenure of the company auditor. Not many databases include information on the auditor of companies for each year. A few examples are: Audit Analytics, Amadeus, Compustat North America and REACH.

The database Audit Analtics covers only the companies that file reports at the SEC (many companies from the US) but it does include a few variables to easily determine the Auditor tenure when combined:

  • LAST REPORTED AUDITOR FKEY = Unique numeric identifier for each auditor
  • LAST REPORTED AUDITOR NAME = Name of the auditor to which the fees in the data row correspond
  • LAST REPORTED AUDITOR SINCE EVENT DATE = known engagement. The auditor since date comes from either the historical auditor databases (i.e. auditor changes) or from directly inquiring with the public registrants.
  • LAST REPORTED AUDITOR SINCE EVENT TYPE = Qualifier field for “Auditor Since Year”. The field can come with two values “Since” or “Since at Least”. “Since” indicates that the auditor was first engaged in the year given in “Auditor Since Year” and has been the auditor since then. “Since at Least” indicates that the auditor has been engaged since the year given in “Auditor Since Year” however we have not confirmed that this was the first year of  engagement.

The first two identify a specific Auditor. The last two identify how long the tenure was/is.
Example data a for a company:
LAST REPORTED AUDITOR FKEY: 1
LAST REPORTED AUDITOR NAME: PricewaterhouseCoopers LLP
LAST REPORTED AUDITOR SINCE EVENT DATE: 1950-12-31
LAST REPORTED AUDITOR SINCE EVENT TYPE: S

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