Voluntary Auditing: A Synthesis of the Literature

Haapamäki, Elina

doi:10.1080/17449480.2018.1430369

Cited by 9 publications

(11 citation statements)

References 30 publications

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“…While researchers have broadly explored the factors affecting companies' decisions to use internal and external audits (Haapamäki, 2018), research that particularly examines the relationship between ownership structure and the demand for audits is relatively scant. Niskanen et al (2011) and Rönkkö et al (2018) examined the impacts on the use of internal audits and on selecting high-quality auditors of ownership structure represented by ownership type.…”

Section: Ownership Concentration 301mentioning

confidence: 99%

“…The agent theory we discussed above regarding the ownership-governance relationship is further applicable to the ownershipaudit relationship. As summarized in the review papers by Vanstraelen and Schelleman (2017) and Haapamäki (2018), the demand for voluntary audits is related to firm characteristics such as leverage, debt covenants and ownership structure. The impact of ownership features on the audit demand depends on how influential stakeholders are in protecting their interests, in line with the stakeholder theory.…”

Section: Ownership Structure and Auditingmentioning

confidence: 99%

“…In the specification, ownership structure is represented by the shares owned by the largest shareholder (Concentration) and the type of the dominant shareholder (domestic private ownership and foreign ownership). Following previous studies on audit demand (Haapamäki, 2018), variables such as sales, firm size (in terms of employment), loan application and legal status are treated as control variables in the specification. In addition, we incorporate interaction terms between Concentration and country dummies to control for heterogeneity across countries.…”

Section: Model A: the Full Samplementioning

confidence: 99%

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Ownership concentration, foreign ownership and auditing: evidence from SMEs in Latin America

Zhang

Cang

2021

PAR

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Purpose This paper aims to investigate the impact of ownership concentration of the largest shareholder and foreign ownership on the demand for an external audit for small and medium-sized enterprises (SMEs) in six Latin American countries. In particular, the authors test whether foreign-owned firms (compared with domestic private-owned firms) and domestic firms with minority foreign shareholders are more likely engaged in audit assurance. Design/methodology/approach The authors applied the logit model to estimate the impact of ownership concentration and owner/shareholder type on audit demand, using a sample of 4,609 SMEs. The probabilities of being audited for firms in these countries are then calculated from the estimation results. Findings The empirical results suggest an inverse relationship between ownership concentration and audit demand only for Uruguay and Peru. However, foreign-owned firms and domestic private-owned firms with minority foreign ownership have a high probability of being audited for all sample countries. Research limitations/implications Policymakers in developing countries may promote foreign investments in domestic private-owned firms to improve their corporate transparency and governance. Originality/value This study contributes to the growing literature on the impact of ownership on audit demand by particularly focusing on foreign owners and foreign minority shareholders. The findings indicate that foreign ownership (either majority or minority) contributes to corporate transparency and business environments in emerging countries.

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Section: Ownership Concentration 301mentioning

confidence: 99%

Section: Ownership Structure and Auditingmentioning

confidence: 99%

Section: Model A: the Full Samplementioning

confidence: 99%

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Ownership concentration, foreign ownership and auditing: evidence from SMEs in Latin America

Zhang

Cang

2021

PAR

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“…The prior literature has highlighted the possibility that small firms could benefit from an extended review (Haapamäki, 2018), but prior studies have not extensively investigated the consequences of an extended review. Therefore, the suggestion of examining alternatives to statutory audits should be relevant and worthwhile investigating in the Finnish context, as the comment letters proposed.…”

Section: (86) 20(77)mentioning

confidence: 99%

An examination of comment letters concerning an increase in audit exemption thresholds. Evidence from Finland

Haapamäki

2021

Accounting Forum

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This study examines how interest groups have reacted to the suggested increase in the audit exemption thresholds in Finland. The results suggest that the lobbying opponents objected to the increase because of the benefits gained from the auditing of financial statements. Considerable reliance is placed on the audited accounts of Finnish small firms in maintaining societal functionality. Hence, the results are supported by the public interest theory. In contrast, the comment letters that supported the increase highlighted the need to follow international trends. The findings of the lobbying behaviour suggest that the interest groups collected information and strategically transferred it to the ministry with the objective of influencing the regulatory outcome. To conclude, this study contributes to a more detailed understanding of the role that the key arguments both for and against the proposed regulatory change played in the case of increasing the audit exemption thresholds. Finally, this study joins existing lobbying literature and contributes to this stream of research by shedding light on the importance of the argumentation strategies used in the Finnish case.

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“…Research conducted by Haapamäki (2018) discovered that there was a significant strong relationship between management ownership and voluntary audits. Similar findings were found in Engku et al (2012) that showed management ownership as significant in order to have separation of ownership and controller and need to be independent to evaluate the financial statements of companies.…”

Section: Smes In Malaysiamentioning

confidence: 99%

Factors Influencing Voluntary Audit among Small and Medium Enterprises: The Malaysian Evidence

Ghani

Munir

Zam

et al. 2020

Humanities and Social Sciences Letters

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Voluntary Auditing: A Synthesis of the Literature

Cited by 9 publications

References 30 publications

Ownership concentration, foreign ownership and auditing: evidence from SMEs in Latin America

Ownership concentration, foreign ownership and auditing: evidence from SMEs in Latin America

An examination of comment letters concerning an increase in audit exemption thresholds. Evidence from Finland

Factors Influencing Voluntary Audit among Small and Medium Enterprises: The Malaysian Evidence

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