Did Corporate Governance Compliance Have an Impact on Auditor Selection and Quality? Evidence From FTSE 350

Ali Gerged, Babikir Mahamat, Ibrahim Elmghaamez

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

This paper examines the possible effects of corporate governance (GC) on audit quality (AQ) among the FTSE 350 companies. Using a sample of 180 companies from 2012 to 2017 (i.e. 1080 firm-year observations) a binary logistic model has been employed to investigate the CG-AQ nexus. This analysis was supported by conducting a probit logistic model as a sensitivity analysis. Our findings are associative of a heterogeneous impact of CG on AQ post the implementation of the 2012 CG reforms in the UK. For example, although institutional ownership and management ownership can predict AQ, board independence, non-executive directors and audit committee are not attributed to AQ in the UK. This implies that corporate compliance with good CG practices has a limited impact on the decision to select a Big4 auditor in the UK. Despite the limitations of our study, we hope it can motivate further investigations in this area.
Original languageEnglish
Pages (from-to)51–60
Number of pages10
JournalInternational Journal of Disclosure and Governance
Volume17
Issue number2-3
Early online date4 Jul 2020
DOIs
Publication statusPublished - 1 Sep 2020

Keywords

  • Corporate governance
  • Audit quality
  • Auditor selection
  • Audit quality Auditor selection FTSE 350
  • UK
  • FTSE 350

ASJC Scopus subject areas

  • Economics and Econometrics
  • Accounting
  • Business and International Management
  • Finance
  • Strategy and Management

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