4. Empirical Results
4.1 Univariate Results.
We perform univariate tests to investigate the impact of internal corporate governance mechanisms on the decision to hire a Big N auditor. Table 3 reports the results of our mean and median comparisons of our regression variables between the Big N and nonBig N sub-samples. As we note, the average of OUTS is significantly higher at the 1% level for the sub-sample of firms with a Big N auditor and suggests that firms with more outside directors are more likely to hire a Big N auditor. We also observe that the average of DUAL is significantly lower at the 1% level for the sub-sample of firms with a Big N auditor. This finding is also consistent with H3 and suggests that firms with CEO duality are less likely to hire a Big N auditor. However, the average of BS is not significantly for the sub-sample of firms with a Big N auditor, failing to provide a support for H1. In summary, our univariate results provide a preliminary evidence for the conjecture that firms that appoint a Big N auditor are characterized by less dual functions and more outside directors present in their board.
