Does Auditor Tenure Disclosure Affect Shareholder Ratification Voting?

SUMMARY The Public Company Accounting Oversight Board requires audit reports to include information about auditor tenure for fiscal years ending on or after December 15, 2017. Tanyi, Rama, and Raghunandan (2021) examine the impact of this requirement shareholder ratification voting auditors. Consistent with shareholders sharing oft-expressed views legislators regulators that long may impair independence quality, they find opposition increases (decreases) long-tenured (short-tenured) auditors disclosure. Thus, very act public disclosure in report appears have impacted investors’ decisions. results suggest should respond increased scrutiny by proactively engaging committees their clients. are also relevant context Securities Exchange Commission’s efforts such tenure-disclosure requirements registrants’ proxy statements.