دانلود رایگان مقاله انگلیسی اثربخشی حاکمیت شرکتی داخلی و کیفیت حسابرسی: نقش تمرکز مالکیت - شواهد مالزیایی - امرالد 2018

Abstract

Purpose – This study is motivated by the competing views on whether internal governance mechanisms complement or substitute for external auditing, and how this association is affected by ownership concentration. The complementary view predicts that good internal governance mechanisms are related to high-quality audit. On the other hand, corporate governance mechanisms may be substituted for each other, so more investment in governance mechanisms leads to less investment in external auditing. Therefore, this study aims to examine the association between internal governance mechanisms and the demand for audit quality. Design/methodology/approach – Data from Malaysian listed companies during the period 2009 to 2012 are used. Ordinary least square (OLS) regression is applied to analyse the data. Findings – Companies with a higher concentration of ownership are less likely to demand extensive auditing. In addition, the study provides supporting evidence for the complementary association between a company’s governance and audit fees. However, the ownership concentration plays a minor role in the positive association between internal corporate governance and audit quality. Further tests are conducted and support the main findings. Practical implications – Significant implications are provided for the audit profession in emerging economies, where concentrated ownership is common, to help policymakers and regulators in determining the power of controlling shareholders on audit quality and firm’s governance. The study’s findings open up avenues for further research. Originality/value – This is the first work to address the role of ownership concentration in the association between corporate governance and audit quality; it suggests that the ownership structure must be considered in examining the effectiveness of corporate governance. The study also provides a comprehensive combination of internal governance mechanisms.

5. Conclusions

This paper provides supporting evidence for the prediction of Desender et al. (2013) that the ownership structure of corporations must be considered in examining the effectiveness of corporate governance. Specifically, the current paper examines the role of OC on the relationship between internal corporate governance mechanisms (board of directors, audit committee and IAF characteristics) and the demand for audit quality measured by audit fees. First, we examine the direct impact of OC and corporate governance effectiveness on audit fees. It is reported that OC is negatively related to the demand for extensive audit service. Our findings are consistent with previous literature, that the firms with effective corporate governance are more likely to pay higher audit fees; this supports the complementary view between internal governance mechanisms and external auditing (Hay et al., 2008; Srinidhi et al., 2014; Wahab et al., 2011). Second, we test the impact of OC on the association between a firm’s governance and audit fees. Empirical evidence suggests that ownership structure plays an essential role in forming a firm’s governance and how it monitors managers. Specifically, firms with high OC moderate the positive relationship between governance and the demand for extensive audit service. The results also show that the presence of insider controlling shareholders will replace the complementary association between the firm’s governance and the demand for audit quality in a substitution association. The findings of further analysis support the main results. Generally, the findings of this study provide good insights into the role of OC in forming an association between internal governance mechanisms and audit quality in Malaysian firms.