Characteristics of non-audit services and financial restatements in Malaysia

Wahab, Effiezal Aswadi Abdul; Gist, Willie E.; Majid, W.Z. Abdul

doi:10.1016/j.jcae.2014.10.001

Cited by 29 publications

(30 citation statements)

References 57 publications

(89 reference statements)

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“…18 The results of the control variables remain similar to those in Column 1. In the Column 3 full model, LN_NAF is significantly and positively (0.008, p-value=0.01, two-tailed) related to LN_AF, which is consistent with other studies (e.g., Simunic 1984;Abdul Wahab et al 2014). 19 LN_NAF is essential to the testing of hypothesis 2, reported later.…”

Section: Opinionsupporting

confidence: 89%

Internal Auditing Outsourcing, Nonaudit Services, and Audit Fees

Wahab

Gist

Gul

et al. 2021

Auditing: A Journal of Practice &Amp; Theory

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This study examines the relationship between outsourced internal audits, nonaudit services and audit fees. We use Malaysian data to show that client firms that outsource their internal auditing function (IAF) are associated with lower external audit fees than those with in-house IAF. Moreover, this negative relationship is significantly stronger for firms that purchase greater amounts of nonaudit services (NAS) from the auditor. The results suggest that an auditor who provides NAS to a client and thus earns additional overall revenue is willing to accept lower audit fees provided a high audit quality can be achieved through reliance on outsourced IAFs.

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Section: Opinionsupporting

confidence: 89%

Internal Auditing Outsourcing, Nonaudit Services, and Audit Fees

Wahab

Gist

Gul

et al. 2021

Auditing: A Journal of Practice &Amp; Theory

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“…The study utilised a well-established model employed in previous studies, for instance, Abdul Wahab et al (2014). The dependent variable is financial restatement (RESTATE), whilst the independent variables are CEO tenure, CEO title, CEO gender, CEO expertise, and CEO age.…”

Section: Model Specificationmentioning

confidence: 99%

Chief Executive Officer Characteristics and Financial Restatements in Malaysia

Altarawneh¹,

Shafie²,

Ishak³

2020

IJFR

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The purpose of this paper is to investigate whether the Chief Executive Officer (CEO) characteristics affect the occurrence of financial restatements in Malaysian firms. The CEO characteristics used in this study were tenure, honorific title, gender, expertise, and age. In addition, the financial restatement has been measured as a dummy variable as to whether companies restate their financial statements or not. The sample of this study comprised 442 companies listed in the main market of Bursa Malaysia during the period 2012–2016. The panel data method was utilised to analyse the data. This study employed a logistic regression analysis. The results of this study revealed that there is a positive and significant relationship between CEO tenure and CEO gender with financial restatements. In addition, this study found a negative and significant relationship between CEO honorific title and financial restatements. However, the results found insignificant relationships between CEO expertise and age with financial restatements. This study highlighted the importance of considering CEO characteristics as one of the influential determinants of financial restatements in Malaysian companies.

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“…The second objective is to investigate the impact of types of non-audit services on accruals quality. Several studies (Abdul Wahab et al , 2014; Alexander and Hay, 2013; Huang et al , 2007; Paterson and Valencia, 2011; Walker and Hay, 2013) have suggested that certain types of non-audit services have different effects as related to economic bonding or knowledge spillover on audit services. We segregated the non-audit services as tax-related, audit-related and other non-audit services.…”

Section: Research Aimsmentioning

confidence: 99%

“…Che Ahmad et al (2006) and Abdul Wahab et al (2013, 2014, 2015) examine the relationship between non-audit and audit fees, the propensity of the going-concern audit opinion and financial restatements. The findings are mixed and inconclusive, as some studies identify the support of knowledge spillover (Che Ahmad et al , 2006; Abdul Wahab et al , 2014), whereas others (Abdul Wahab et al , 2013, 2015) identify no such support. However, none of the abovementioned studies examines the impact of non-audit services on accruals quality.…”

Section: Research Aimsmentioning

confidence: 99%

Characteristics of auditors’ non-audit services and accruals quality in Malaysia

Abdul

Majid

Harymawan

et al. 2020

PAR

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Purpose The purchase of non-audit services from incumbent auditors has generated considerable attention. This study aims to examine the relationship between characteristics of non-audit services, namely, the recurrence and types of services, and accruals quality in Malaysia. Design/methodology/approach This study analyzed hand-collected audit and non-audit fees of 1,117 observations from Malaysian firms from 2009 to 2011. This study used descriptive analysis, univariate tests and multivariate regression to investigate the potential effect of non-audit services on accruals quality. Findings Non-audit services are associated with lower accruals quality. Recurring and non-recurring non-audit service fees are detrimental to the quality of accruals, as are all types of recurring non-audit services. Only non-recurring audit-related services decrease accruals quality. The results demonstrate that provisions of non-audit services create economic bonding, and thus a threat to auditor independence. Results remain robust with the inclusion of corporate governance and institutional variables. Research limitations/implications The sample period might represent a limitation as it only covers three years of data. This limitation is mainly because of the nature of data collection of the non-audit services fees. Practical implications The findings could suggest a refinement on the Malaysian Institute of Accountants (MIA) by-laws focusing on auditor independence, and it could assist other regulative bodies such as the Securities Commission, the stock exchange (Bursa Malaysia) in ensuring better governance on the provision of non-audit services. Originality/value This study is the first that provides evidence on the relationship between non-audit services, types, and recurring and non-recurring non-audit services and accruals quality in Malaysia.

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Characteristics of non-audit services and financial restatements in Malaysia

Cited by 29 publications

References 57 publications

Internal Auditing Outsourcing, Nonaudit Services, and Audit Fees

Internal Auditing Outsourcing, Nonaudit Services, and Audit Fees

Chief Executive Officer Characteristics and Financial Restatements in Malaysia

Characteristics of auditors’ non-audit services and accruals quality in Malaysia

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