The impact of external auditors on firms’ financial restatements: a review of archival studies and implications for future research

Abstract A systematic literature review includes 69 archival studies on the impact of external auditors firms’ financial restatements, based principal agent theory. In more detail, we separate between auditor incentives and competencies to supply a high audit quality. Financial restatements represent one most important proxies quality in research, stressing an increased relevance empirical business practice regulatory initiatives. The highlights that many show inconclusive results (e.g., fee rotation studies). But there are indications especially expertise firm size significantly decrease restatements. discussing potential future emphasize need for detailed analysis proxies, controls risk, inclusion (corporate) governance mechanisms as possible moderators or mediators, sustainability issues team.