External Audit Quality And Ownership Structure

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External Audit Quality and Ownership Structure

Author : Amel Kouaib
Publisher :
ISBN 13 :
Total Pages : 12 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis External Audit Quality and Ownership Structure by : Amel Kouaib

Download or read book External Audit Quality and Ownership Structure written by Amel Kouaib and published by . This book was released on 2014 with total page 12 pages. Available in PDF, EPUB and Kindle. Book excerpt: This article emphasizes the significance of researching the cross effect of using jointly external audit quality and ownership structure over managerial discretion in a largely unexplored, non-Western and emerging context. The analysis is based on a sample of 61 Tunisian firms listed and unlisted on the Tunis Stock Exchange and operating in the industrial and commercial sectors during the period 2007-2011. To provide evidence on this topic, we conduct an empirical examination. First, we examine the effect of external audit quality and ownership structure on the discretionary accruals for the whole sample. We find that only auditor reputation has a negative and significant effect on earnings management. Second, this article provides empirical evidence on the cross effect of external audit quality variables and capital concentration on earnings management. This test suggests that this combination has a negative and significant effect on earnings management in industrial firms but it has a positive and non significant effect in commercial firms. Finally, the third empirical test concerns the combined effect of external audit quality and institutional property on earnings management. We find that the cross effect of this combined relation is negatively and significantly associated with earnings management of industrial firms but it has no significant effect on the earnings management of commercial firms. As for the cross effect of the auditor seniority and the institutional property, it has a positive and a significant effect in the commercial sectors, while, it is positively and non-significantly associated with earnings management of industrial firms.

The Impact of Ownership Structure and External Audit on Accruals and Real Activities Earnings Management in Jordan

Author : Mohammed Ibrahim Idris Idris
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (89 download)

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Book Synopsis The Impact of Ownership Structure and External Audit on Accruals and Real Activities Earnings Management in Jordan by : Mohammed Ibrahim Idris Idris

Download or read book The Impact of Ownership Structure and External Audit on Accruals and Real Activities Earnings Management in Jordan written by Mohammed Ibrahim Idris Idris and published by . This book was released on 2012 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: Agency theory predicts that ownership structure monitoring mechanisms can effectively align the interests of managers with those of the shareholders. In additions, it views external audit as a function that lends credibility to the information disclosed in financial reports. Prior research sustains these predictions in developed markets such as in the US. However, institutional settings such as ownership structure and regulatory oversight bodies differ around the world and accordingly, the sustain ability of agency theory predictions might also differ. Further, little research differentiates between accruals and real activities earnings management in contexts such as the Jordanian where ownership is concentrated, investors' protection is weak and capital market is still evolving. Therefore, this study addresses these issues and investigates the validity of agency theory predictions concerning the effectiveness of ownership structure and external audit monitoring mechanisms in mitigating both accruals and real activities earnings management in Jordan. In this study, four measures of earnings management are estimated through the models of Kothari et al. (2005) and Roychowdhury (2006): Magnitudes of abnormal accruals are obtained from the former model and magnitudes of abnormal cash flow from operating activities, abnormal production costs and abnormal discretionary expenses are obtained from the latter model. As a result, four empirical models are constructed in which the estimated earnings management measures represent the dependent variables. Independent variables in each empirical model are the same and are classified into three categories: first, ownership structure variables include ownership concentration, controlling shareholders, institutional ownership and foreign ownership. The second category includes external audit quality measured by auditor size. Third, a set of control variables include board size, leverage, growth and firm size. These models are tested using the population of all manufacturing firms listed on Amman Stock Exchange over the period 2005 - 2008. The results reveal that controlling shareholders appear effective in constraining accruals manipulations, sales manipulations and production costs manipulations. As for manipulations in discretionary expenses, the results show that . only high levels of institutional ownership can effectively deter abnormal discretionary expenses. Moreover, contrary to the popular convention, the results suggest that non-big 5 auditors in Jordan who in fact mitigate abnormal accruals not big 5 auditors. Finally, no evidence is found supportive of the substitutive effect. That is, firms that are prevented from managing their earnings through accruals due to the enhanced scrutiny of non-big 5 auditors, do not resort to sales manipulations, production costs manipulations or discretionary expenses manipulations as substitutes to achieve desired levels of reported earnings. Given these findings, the present study provides understanding and extension for agency theory literature that focuses on earnings management in general and in emerging markets in particular. It highlights challenges to applicability of agency theory in emerging markets where corporate governance mechanisms are supposed to mitigate the practice of earnings management. As such, these fading's could be helpful to investors and other stakeholders in making rational contractual decisions, especially when such decisions involve non-owner- controlled firms. Finally, Amman Stock Exchange could impose the corporate governance codes that actively promote internal corporate governance mechanisms to restrain accruals and real activities earnings management.

Management Ownership Structure, Audit Quality and Impairment of Assets

Author : Wai-yee Pauline Wong
Publisher :
ISBN 13 :
Total Pages : 486 pages
Book Rating : 4.:/5 (23 download)

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Book Synopsis Management Ownership Structure, Audit Quality and Impairment of Assets by : Wai-yee Pauline Wong

Download or read book Management Ownership Structure, Audit Quality and Impairment of Assets written by Wai-yee Pauline Wong and published by . This book was released on 2008 with total page 486 pages. Available in PDF, EPUB and Kindle. Book excerpt:

External Audit Arrangements at Central Banks

Author : Mr.Atilla Arda
Publisher : International Monetary Fund
ISBN 13 : 1484375505
Total Pages : 42 pages
Book Rating : 4.4/5 (843 download)

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Book Synopsis External Audit Arrangements at Central Banks by : Mr.Atilla Arda

Download or read book External Audit Arrangements at Central Banks written by Mr.Atilla Arda and published by International Monetary Fund. This book was released on 2018-09-11 with total page 42 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper takes stock of external audit arrangements at central banks. Its focus is on the annual audit of central bank financial statements, as well as legal and institutional measures that support audit quality and independence. The paper outlines good practices in these areas and provides a summary of actual practices observed based on a review of audited financial statements and central bank legislation. While the audit frameworks for central banks differ depending on their legal and institutional circumstances, central banks’ external audits increasingly follow international standards. Most of them are audited by auditors with international affiliations and embrace modern governance structures that provide for audit oversight. However, the paper also notes that a sizeable number of central banks do not publish the audit results in a timely manner, which leaves room for improvement in transparency practices.

Ownership Structure, Audit Quality and Firm Performance Moderating and Direct-Effect Models

Author : Sulaiman Abdullah
Publisher :
ISBN 13 :
Total Pages : 0 pages
Book Rating : 4.:/5 (137 download)

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Book Synopsis Ownership Structure, Audit Quality and Firm Performance Moderating and Direct-Effect Models by : Sulaiman Abdullah

Download or read book Ownership Structure, Audit Quality and Firm Performance Moderating and Direct-Effect Models written by Sulaiman Abdullah and published by . This book was released on 2022 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper had two main objectives, with the first being to examine the direct impact of concentration and managerial ownership on firm performance (ROA) among non-financial firms in Oman for the years 2010 until 2014. Secondly, this paper aimed to examine the moderating impact of audit quality on the ownership concentration, managerial ownership-firm performance relationship of the same sample. The study made use of leverage as the control variable. Moreover, in order to test the direct relationship between independent variables and dependent variable, this study used OLS regression. Aside from this, the study focused on the non-financial sector owing to the distinction between the structure and regulations between the two sectors (financial and non-financial sector) for the years 2012-2014. More importantly, this study revealed that the ownership concentration has a positive and significant effect on ROA. In the same path, the managerial ownership has a positive but insignificant association with ROA. Moreover, the study failed to find a moderating effect of the audit quality on the relationship between ownership concentration and managerial ownership, and firm performance of Omani companies. Lastly, the study listed and discussed the study limitations and recommendations for future studies.

Corporate Governance Strengthening Latin American Corporate Governance The Role of Institutional Investors

Author : OECD
Publisher : OECD Publishing
ISBN 13 : 9264116052
Total Pages : 78 pages
Book Rating : 4.2/5 (641 download)

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Book Synopsis Corporate Governance Strengthening Latin American Corporate Governance The Role of Institutional Investors by : OECD

Download or read book Corporate Governance Strengthening Latin American Corporate Governance The Role of Institutional Investors written by OECD and published by OECD Publishing. This book was released on 2011-07-01 with total page 78 pages. Available in PDF, EPUB and Kindle. Book excerpt: This report reflects long-term, in-depth discussion and debate by participants in the Latin American Roundtable on Corporate Governance.

Corporate Ownership Structure and Audit Fees

Author : Nurul Farha binti Mohamed Rusdi
Publisher :
ISBN 13 :
Total Pages : 186 pages
Book Rating : 4.:/5 (957 download)

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Book Synopsis Corporate Ownership Structure and Audit Fees by : Nurul Farha binti Mohamed Rusdi

Download or read book Corporate Ownership Structure and Audit Fees written by Nurul Farha binti Mohamed Rusdi and published by . This book was released on 2013 with total page 186 pages. Available in PDF, EPUB and Kindle. Book excerpt: The increasing focus on the impact of different ownership structures is prompted by the existence of monitoring differences by shareholders on corporate affairs including the financial reporting process. The external auditors' reliance on the corporate internal control varies according to the different ownership structures with a concomitant variation in the fees charged to their clients. A number of corporate collapses worldwide have highlighted the need for strong corporate governance to strengthen the financial reporting process with an emphasis on audit quality. The purpose of this study is to investigate the association between corporate ownership structures and audit fees paid to external auditors by Malaysian companies listed on Bursa Malaysia. This study focuses on the extent of the auditor's reliance on the client's internal control inasmuch as the corporate ownership structures are varied, and, ultimately, affect the audit fees. This study applies the agency theory in formulating three hypotheses that guide the results analysis. By employing a multi regression model for a sample of 345 Malaysian companies listed on Bursa Malaysia, this study examines the relationship of ownership structure, namely, managerial ownership, foreign ownership and government ownership with audit fees using data for 2010. The results show a significant positive relationship between audit fees and firms with larger foreign ownership and government ownership but no significant relationship with firms with higher managerial ownership. This study contributes recent evidence concerning the relationship between corporate ownership structure and audit fees. The regulator may consider ownership structure on the standards or regulation setting in order to be practical and operationalized in line with the impact associated with different ownership structures. The practitioners may also design appropriate methodologies and procedures for the different ownership structures for high quality service and to standardize the risk mitigation process.

Auditor Independence

Author : Ismail Adelopo
Publisher : Routledge
ISBN 13 : 1317177436
Total Pages : 241 pages
Book Rating : 4.3/5 (171 download)

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Book Synopsis Auditor Independence by : Ismail Adelopo

Download or read book Auditor Independence written by Ismail Adelopo and published by Routledge. This book was released on 2016-04-08 with total page 241 pages. Available in PDF, EPUB and Kindle. Book excerpt: In Auditor Independence, Ismail Adelopo argues that the importance of auditors' independence cannot be over-emphasised. Not only do auditors provide certification of the truth and fairness of the information prepared by managers, they also have a duty to express opinions on the degree of compliance with laws and regulations guiding a firm's operations. Theirs is a socially important responsibility. In all that has been proposed to mitigate the governance crisis and restore confidence in the market system, relatively little attention has been paid to auditor independence. Examining the historical role of auditing in corporate governance and the regulatory context, this book sets the function within a theoretical framework and then provides empirical analysis of the problem issues such as the relationship between audit committees and external auditors and the probity of providing non-auditing services to audit clients. The focus on matters that are damaging to market confidence and threatening to the reputation of the auditing profession, means the conclusions and recommendations in this book are important for key stakeholders, including policy makers, regulators, those running companies, and their investors and customers. This is also a book for those responsible for training in the auditing profession and for others with a research or academic interest in the matters addressed.

Board Characteristics and External Audit Quality

Author : M. Rabah Gana
Publisher :
ISBN 13 :
Total Pages : 7 pages
Book Rating : 4.:/5 (13 download)

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Book Synopsis Board Characteristics and External Audit Quality by : M. Rabah Gana

Download or read book Board Characteristics and External Audit Quality written by M. Rabah Gana and published by . This book was released on 2016 with total page 7 pages. Available in PDF, EPUB and Kindle. Book excerpt: In this paper, we examine the impact of directors' board on external audit quality over the period 2003-2007 for 96 Belgian listed companies on the Euronext Brussels Stock Exchange. We measure audit quality by using an index for that. To construct the index of audit quality IQAUD, we follow the approach of Depeors (2010). Five attributes are considered: Big4 auditor, co-auditor, Big4 auditor and co-audit, seniority of auditor and audit fees.The composition of the index IQAUD is determined by using the “step by step” method of Cronbach's alpha coefficient (Curt et al., 1997). This procedure allows finding a subset of items that must be as reliable as possible. The results of our regression model, using panel data, confirm that external audit quality and board characteristics (independence and diligence) are complementary mechanisms. However, we can't conclude to any significant relationship of audit quality with board dual structure and its size.

Auditors Consideration of Corporate Governance

Author : Masood Fooladi
Publisher :
ISBN 13 :
Total Pages : 7 pages
Book Rating : 4.:/5 (131 download)

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Book Synopsis Auditors Consideration of Corporate Governance by : Masood Fooladi

Download or read book Auditors Consideration of Corporate Governance written by Masood Fooladi and published by . This book was released on 2013 with total page 7 pages. Available in PDF, EPUB and Kindle. Book excerpt: In modern business world, companies need to attract a large number of shareholders because of the large amount of required capital. In these companies, shareholders hire managers to direct the firm and make decisions on behalf of them because they cannot have a full control over the firm's activities. Therefore, managers have the competitive advantage of information within the firm rather than the shareholders which leads to asymmetry of information between managers and shareholders. In addition, agency theory assumes an opportunistic behavior that managers want to maximize their own expected interest disregard of shareholders right. In other words, managers may not necessarily make decisions in the best interests of shareholders because of conflict of interest and hence impose the agency costs on the firm. Agency theory suggests that corporate governance (CG) as an effective information system can monitor the management and align the interests of executives with those of shareholders to mitigate the agency costs. In addition, auditors must work with other factors in CG structure to ensure that stakeholders receive the highest quality of financial reports as well as help to protect the interests of stakeholders. Since CG and external audit services are complementary and the purpose of both is to protect stakeholders' interest this study aims to explore the perceptions of professional auditors on the consideration of CG in an audit engagement. Applying a semi-structured interview with two certified public accountants (CPA), this study obtains the opinion of experts how to consider CG in their efforts. Analyzing of interviewees' response suggests that auditors consider CG mechanism as a system of supervision to control the opportunistic behavior of individuals and monitor the financial reporting process. They use CG information in planning stage more than other stages to define the extent of efforts for audit process. Weaker CG mechanism increases the control risk and required auditors to make more efforts in their audits. Among different aspects of CG the board of directors is more considered by auditors. They believe that audit committee is an important mechanism in CG but board of directors affects it and hence board of directors has the most power to make decisions regarding financial reporting quality. Other characteristic of CG mechanism which can be considered by auditors is ownership structure and compensation committee.

Corporate Governance Mechanisms and Firm Performance

Author : Shveta Singh
Publisher : Springer Nature
ISBN 13 : 9811924600
Total Pages : 204 pages
Book Rating : 4.8/5 (119 download)

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Book Synopsis Corporate Governance Mechanisms and Firm Performance by : Shveta Singh

Download or read book Corporate Governance Mechanisms and Firm Performance written by Shveta Singh and published by Springer Nature. This book was released on 2022-05-12 with total page 204 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book begins by analysing the various corporate governance mechanisms explored in the extant literature and determining their effectiveness in enhancing the firm value using multivariate analysis. The findings are of global relevance as the corporate governance regulations of most countries focus on independent directors as the mainstay of good governance. The empirical evidence from the first objective of this study corroborates the claim that independent directors do not strengthen the firms’ governance quality. The book is one of the few works to have analysed the possible reasons behind the ineffectiveness of the independent directors. Also, in view of the famous concept of the bundle of governance mechanisms, it might be possible that the independent directors strengthen the firms’ governance quality indirectly by strengthening other governance mechanisms. This aspect too has little precedence. This study adopts a novel moderation and mediation approach to analyse the monitoring behaviour of independent directors in relation to other governance mechanisms. The work is a must read for corporate players as well as researchers and scholars studying this discipline.

Demand for Audit Quality in Small Private Firms

Author : Mervi Niskanen
Publisher :
ISBN 13 :
Total Pages : 33 pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Demand for Audit Quality in Small Private Firms by : Mervi Niskanen

Download or read book Demand for Audit Quality in Small Private Firms written by Mervi Niskanen and published by . This book was released on 2009 with total page 33 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study investigates the interaction between audit quality and agency costs, when managerial ownership is used as a proxy for agency costs. The literature on audit quality suggests that firms with high agency costs are more likely to demand audit quality. Our database enables us to compare the demand for audit quality with two different measures; demand for Big 4 auditors and certified auditors with strict professional requirements. The results show that an increase in managerial ownership decreases the likelihood that the firm will engage a Big 4 auditor but it does not have an impact on the demand for certified auditors. Our findings also support previous studies that suggest a nonlinear connection between managerial ownership and demand for audit quality in terms of Big 4 audits. This suggests that audits by Big 4 audit firms are used in informationally opaque private firms to overcome agency costs. We also find that the probability of choosing a Big 4 auditor increases with an increase in firm size and the presence of foreign sales. An increase in leverage increases the likelihood that the firm will engage a Big 4 auditor only in the larger firms and in firms, in which management ownership is above 50%.

The Basics of IT Audit

Author : Stephen D. Gantz
Publisher : Elsevier
ISBN 13 : 0124171761
Total Pages : 271 pages
Book Rating : 4.1/5 (241 download)

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Book Synopsis The Basics of IT Audit by : Stephen D. Gantz

Download or read book The Basics of IT Audit written by Stephen D. Gantz and published by Elsevier. This book was released on 2013-10-31 with total page 271 pages. Available in PDF, EPUB and Kindle. Book excerpt: The Basics of IT Audit: Purposes, Processes, and Practical Information provides you with a thorough, yet concise overview of IT auditing. Packed with specific examples, this book gives insight into the auditing process and explains regulations and standards such as the ISO-27000, series program, CoBIT, ITIL, Sarbanes-Oxley, and HIPPA. IT auditing occurs in some form in virtually every organization, private or public, large or small. The large number and wide variety of laws, regulations, policies, and industry standards that call for IT auditing make it hard for organizations to consistently and effectively prepare for, conduct, and respond to the results of audits, or to comply with audit requirements. This guide provides you with all the necessary information if you're preparing for an IT audit, participating in an IT audit or responding to an IT audit. Provides a concise treatment of IT auditing, allowing you to prepare for, participate in, and respond to the results Discusses the pros and cons of doing internal and external IT audits, including the benefits and potential drawbacks of each Covers the basics of complex regulations and standards, such as Sarbanes-Oxley, SEC (public companies), HIPAA, and FFIEC Includes most methods and frameworks, including GAAS, COSO, COBIT, ITIL, ISO (27000), and FISCAM

Corporate governance and audit quality

Author :
Publisher :
ISBN 13 :
Total Pages : 462 pages
Book Rating : 4.:/5 (931 download)

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Book Synopsis Corporate governance and audit quality by :

Download or read book Corporate governance and audit quality written by and published by . This book was released on 2014 with total page 462 pages. Available in PDF, EPUB and Kindle. Book excerpt: This study investigates three unique governance mechanisms of the recently developed Kuwaiti market: audit pair choice (joint audit), dominant blockholders and the adoption of Islamic business principles. The requirement to appoint at least two external auditors creates a more complex agency problem than does the traditional dichotomy of Big N/non-Big N auditor. Using a sample of all non-bank listed firms in the Kuwait Stock Exchange (KSE), this study examines the effect of dominant blockholders in the ownership structure and the adoption of Islamic business principles on audit pair choice. Following this, this study explores whether the resultant audit pair choice is associated with the quality of the reported financial information.

The Benefits and Costs of Group Affiliation

Author : Stijn Claessens
Publisher :
ISBN 13 :
Total Pages : 36 pages
Book Rating : 4.:/5 (16 download)

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Book Synopsis The Benefits and Costs of Group Affiliation by : Stijn Claessens

Download or read book The Benefits and Costs of Group Affiliation written by Stijn Claessens and published by . This book was released on 2002 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper investigates the benefits and associated agency costs of using internal capital markets through affiliating with groups using data of two thousand firms from nine East Asian economies between 1994-96. We find that mature and slow-growing firms with ownership structures more likely to create agency problems gain more from group affiliation, while young and high-growth firms more likely lose. Agency problems are important explanatory factors of firm value in economies outside Japan, but less so in Japan. Consistent with the literature, financially-constrained firms benefit from group affiliation. Our results are robust to different time periods and estimation techniques.

Principles of External Auditing

Author : Brenda Porter
Publisher : John Wiley & Sons
ISBN 13 : 0470974451
Total Pages : 905 pages
Book Rating : 4.4/5 (79 download)

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Book Synopsis Principles of External Auditing by : Brenda Porter

Download or read book Principles of External Auditing written by Brenda Porter and published by John Wiley & Sons. This book was released on 2014-03-03 with total page 905 pages. Available in PDF, EPUB and Kindle. Book excerpt: Principles of External Auditing has become established as one of the leading textbooks for students studying auditing. Striking a careful balance between theory and practice, the book describes and explains, in non-technical language, the nature of the audit function and the principles of the audit process. The book covers international auditing and accounting standards and relevant statute and case law. It explains the fundamental concepts of auditing and takes the reader through the various stages of the audit process. It also discusses topical aspects of auditing such as legal liability, audit risk, quality control, and the impact of information technology. Brenda Porter is currently visiting Professor at Exeter University and Chulalongkorn University, Bangkok.

Corporate Governance, Audit Quality and the Sarbanes-Oxley Act

Author : Lawrence J. Abbott
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (129 download)

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Book Synopsis Corporate Governance, Audit Quality and the Sarbanes-Oxley Act by : Lawrence J. Abbott

Download or read book Corporate Governance, Audit Quality and the Sarbanes-Oxley Act written by Lawrence J. Abbott and published by . This book was released on 2015 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: The objective of this study is to extend the current literature related to non-audit services by investigating the area of internal audit outsourcing to the external auditor. We posit that certain types of internal audit outsourcing (i.e. those which are non-routine, and thus tend to be non-recurring in nature) are unlikely to lead to economic bonding, while offering significant potential for improvements in audit coverage and scope when provided by the external auditor. Alternatively, outsourcing routine internal audit tasks is more likely to lead to economic bonding, as well as creating disincentives for internal auditor independence. We obtain data from a survey of 219 Chief Internal Auditors and from relevant proxy statements in the year 2000, prior to the Sarbanes-Oxley Act. Our results are consistent with firms with strong audit committee governance being less likely to outsource routine internal auditing activities to the external auditor. The audit committee's authority to dismiss the chief internal auditor enhances this effect. However, the outsourcing of non-routine internal audit activities such as special projects and EDP consulting are not negatively related to audit committee effectiveness. Additionally, outsourcing of either type of internal audit activity to an outside service provider other than the external auditor is not related to audit committee effectiveness. Collectively, we interpret these findings as supportive of an effective audit committee's ability to monitor the sourcing of the firm's total (i.e. internal and external) audit coverage, while simultaneously exhibiting concern for external auditor independence. Our findings call into question the need for the existing restrictions on some types of internal audit outsourcing to the external auditor, particularly in light of other corporate reporting environment changes enacted by the SOX.