24x7 Service; AnyTime; AnyWhere

The association between corporate governance and auditor switching decision

Abidin, Shamharir and Ishaya, Ishaku Vandi and Mohamad Nor, Mohamad Naimi (2016) The association between corporate governance and auditor switching decision. International Journal of Economics and Financial Issues, 6 (S7). pp. 77-80. ISSN 2146-4138

[thumbnail of IJEFI 6 S7 2016 77 80.pdf]
Available under License Attribution 4.0 International (CC BY 4.0).

Download (297kB) | Preview


The purpose of this study is to examine the association between corporate governance and the propensity of auditor switching.In particular, the study seeks to investigate whether board independence and Chairman-CEO duality, influence the auditor-client realignment exercise. Understanding the reasons why companies switch auditor is very important as auditor switching could inhibit the flow of capital in the securities markets, and subsequently, increase the capital costs. Based on the analysis of 712 non-financial companies listed on Bursa Malaysia during the period from 31st December, 2009 to 2011, the results suggest that the companies with higher non-executive directors than the sample median tend to switch auditor.The Chairman-CEO duality, however, has no effect on the decision. The results also suggest that the provision of non-audit service, changes in key management, company size and Big 4 are significant determinants of auditor switch decision. The outcome of the study indicates the importance of sound governance on auditor switch decision and might provide insightful knowledge which helps shareholders to realize the importance of having balance BODs.

Item Type: Article
Uncontrolled Keywords: Auditor Switch, Audit Market, Auditor Change, Corporate Governance, Malaysia
Subjects: H Social Sciences > HF Commerce > HF5601 Accounting
Divisions: Tunku Puteri Intan Safinaz School of Accountancy (TISSA)
Depositing User: Dr. Shamharir Abidin
Date Deposited: 05 Apr 2017 07:55
Last Modified: 05 Apr 2017 07:55

Actions (login required)

View Item View Item