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.
|Number of pages||10|
|Journal||International Journal of Disclosure and Governance|
|Early online date||4 Jul 2020|
|Publication status||Published - 1 Sep 2020|
Bibliographical noteThe final publication is available at Springer via http://dx.doi.org/10.1057/s41310-020-00074-1
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- Corporate governance
- Audit quality
- Auditor selection
- Audit quality Auditor selection FTSE 350
- FTSE 350
ASJC Scopus subject areas
- Economics and Econometrics
- Business and International Management
- Strategy and Management