دانلود رایگان مقاله انگلیسی تأثیر حاکمیت شرکتی بر انتخاب حسابرس: شواهدی از آلمان - اشپرینگر 2018

Abstract

Statutory audits are only beneficial if the appropriate audit quality is both provided and perceived by the users of audited financial statements. On the one hand, Big 4 audit firms are commonly viewed as producing high quality audits. On the other hand, regulators complain about the high market share of Big 4 audit firms. In this context, it is of interest to examine the drivers of a Big 4 audit firm selection. Despite extensive prior research, there is still a lack of findings form Continental European countries and on the impact of corporate governance on auditor choice. This paper on hand is intended to fill the related research gap. Thus, our study identifies variables that determine the auditor choice of large German listed companies. Based on a sample of 432 firm-year observations for the period 2010–2014, our logistic regression analysis suggests that the corporate governance structure influences auditor choice significantly. Notably, the annual meeting frequency of the audit committee and the size of the supervisory board are positively associated with the engagement of a Big 4 audit firm. However, the meeting frequency of the supervisory board and the compliance to the German corporate governance code are negatively related to the choice of a Big 4 auditor. Additionally, the proportion of female supervisory board members does not exert a significant impact. The results remain stable when the DAX30 observations, for which statutory audits are exclusively performed by Big 4 audit firms, are excluded. The main contribution of our paper is, that it sheds light on the impact of corporate governance variables not analyzed by prior research, like supervisory board characteristics, deviations from a corporate governance code, or the female quota, in a Continental European setting, and that it mainly indicates a complementary relationship. Despite the peculiarities of the German setting, the two-tier corporate governance system and the low level of investor protection, the findings of our study are not only relevant for Germany, since many other Continental European countries are characterized by a similar environment. The study’s findings are of particular interest for regulators when addressing audit market structure problems.

6 Conclusion

6.1 Summary and implications

The study provides new empirical evidence on the influence of corporate governance quality on auditor choice in Germany. Based on a sample of 432 firm-year observations from firms listed on the regulated market of Frankfurt stock exchange (HDAX), the results suggest that all of these variables used to proxy the quality of corporate governance, except the supervisory board female quota, do indeed have a significant influence on auditor choice. Whereas a complementary effect of the supervisory board’s meeting frequency was expected, the results indicate that it reduces the internal demand for Big 4 auditors and can therefore be regarded as having a substitutional effect on auditor choice. The overall impact of corporate governance on the company’s auditor choice can be considered as substantial. Overall, the majority of our corporate governance variables suggest a significantly positive effect on the selection of a Big 4 auditor. This implies a selfreinforcing effect of good corporate governance. Thus, the selection of a Big 4 auditor might be influenced by higher competencies of client corporate governance. In contrast, our findings suggest a significant impact of agency costs, but fail to reveal a clear direction of the relationship. This might indicate that a high audit quality signal is not perceived as necessary, either because of uninformed users who do not understand such a signal, or because of a high general trust in corporate governance, or both.