Does ownership structure affect the quality of auditor pair composition?

Alfraih, Mishari M.

doi:10.1108/jfra-08-2015-0076

Cited by 15 publications

(43 citation statements)

References 51 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…By contrast, other studies support a negative effect (e.g. Alfraih, 2016;AlQadasi and Abidin, 2018).…”

Section: Introductionmentioning

confidence: 74%

Ownership structure and audit quality: the mediating effect of board independence

Guizani

Abdalkrim

2021

View full text Add to dashboard Cite

Purpose This study aims to examine the mediating effect of board independence on the relationship between ownership structure and audit quality. Design/methodology/approach The research uses generalized methods of moments regression to test the relationship between ownership structure and audit quality. The sample consists of 162 non-financial firms listed on the Gulf Cooperation Council stock markets between the years of 2009 and 2016. To test the significance of the mediating effect, this paper uses the Sobel test. Findings Empirical findings show that companies with higher family ownership are less likely to demand extensive audit services and, as a result, pay lower audit fees. Conversely, this study finds that companies with higher active and passive institutional ownership are more likely to engage high-quality auditors and pay larger audit fees. As for government ownership, it has no significant impact on audit fees. The results also reveal that the negative (positive) effect of family (institutional) ownership on audit quality follows the path through reducing (enhancing) board independence. Further tests are conducted and support the main findings. Practical implications This study has important implications for policymakers and regulators to address the conflict between controlling shareholders and minorities by promoting higher standards of audit quality. The study findings may be useful to investors, assisting them in making better-informed decisions and aids other interested parties in gaining a better understanding of the role played by ownership structure in audit quality. The study also contributes to the strategic board behavior by bringing a new perspective on how boards engage in monitoring by requesting external audit services. This behavior is likely to be influenced by the type of controlling shareholder. Originality/value The main contribution of the present paper is to examine the board composition as a potential mediating variable between ownership structure and audit quality. Moreover, it highlights the issue of improving governance mechanisms.

show abstract

“…By contrast, other studies support a negative effect (e.g. Alfraih, 2016;AlQadasi and Abidin, 2018).…”

Section: Introductionmentioning

confidence: 74%

Ownership structure and audit quality: the mediating effect of board independence

Guizani

Abdalkrim

2021

View full text Add to dashboard Cite

show abstract

“…Percentage of ordinary shares held by the government of at least 5% of the total outstanding shares [14].…”

Section: Notementioning

confidence: 99%

Do Western Hegemony Exist in the Selection of Independent Auditors?

Wijaya¹,

Kurniawan²

2020

Proceedings of the International Conference on Management, Accounting, and Economy (ICMAE 2020)

View full text Add to dashboard Cite

Most business people perceive that big four affiliated public accounting firms have better quality than others. We use the mixing method to uncover the phenomena of internationalization among the auditor selections. This study only explores the empirical aspects of western hegemony in auditor selection but also present. Those Charged with Governance's subjective perceptions of the Westernization in auditing practice. This study uses a sample of companies in the non-financial sector listed on the Indonesia Stock Exchange during 2016-2018. Preliminary analysis results show that institutional and individual ownership are more inclined to choose affiliated bigfour auditors than the local ones. Whereas when compared to the non-big four affiliated accounting firms, institutional ownership is consistently more interested in the big four affiliated. In further analysis, local institutional ownership seems to prefer international affiliated accounting firms. Foreign institutional ownership always shows a preference for the big four affiliated accounting firms. Regarding individual ownership, researchers divide ownership into an independent, board of the director and management. The analysis proves that only management ownership has a role in choosing auditors. The ownership management tends to choose international affiliated accounting firms. Based on the subjective perception, one of the audit committees revealed that there were crucial differences in audit quality between the local and the international affiliated public accounting firms. Affiliated auditors are indeed far more thorough than local. Using Gidden's global modernity theory, we conclude that globally affiliated auditors can create new expertise needed by their users that is different from the past.

show abstract

“…Another alternative suggests a positive relationship between audit quality and clients' institutional ownership. in this regard, Alfraih (2017) investigates the effects of institutional and government ownership on audit quality in Kuwait, his findings show that institutional ownership is positively related to the number of Big 4 auditing firms that audit a company's financial statements. This reflects the powerful and influential role institutional investors play in discouraging management from choosing lower-quality providers.…”

Section: Audit Qualitymentioning

confidence: 99%

The impact of financial crisis on audit quality and audit fee stickiness: evidence from Iran

Salehi

Komeili

Gah

2019

JFRA

View full text Add to dashboard Cite

Purpose There is a few studies about stickiness and changes in audit fees. In previous studies, researchers focused on fees behavior, which is expected to change in the short term, regardless of mentioning stickiness of fees and its possible changes. In this study, the authors investigate stickiness of audit fees and the influential factors, specifically audit quality and financial crisis in an emerging economy. Design/methodology/approach Audit quality is examined under three main criteria, namely, auditor size, auditor industry specialization and auditor tenure. The Altman adjusted bankruptcy model is used to identify firms’ financial crisis. In this study, listed companies in Tehran stock exchange market is investigated during the period of 2009-2015. Multiple regression models are used to test research hypotheses. Furthermore, Chow and Hausman tests are selected to choose among hybrid, fixed and random effects models. Findings The findings show no significant relationship between audit quality and audit fees stickiness. The authors also find that financial crisis has no impact on the association between audit quality and audit fees stickiness. Originality/value The current study almost is the first study, which conducted in emerging market of Iran. So, the results may play a helpful role for developing nations.

show abstract

Does ownership structure affect the quality of auditor pair composition?

Cited by 15 publications

References 51 publications

Ownership structure and audit quality: the mediating effect of board independence

Ownership structure and audit quality: the mediating effect of board independence

Do Western Hegemony Exist in the Selection of Independent Auditors?

The impact of financial crisis on audit quality and audit fee stickiness: evidence from Iran

Contact Info

Product

Resources

About