Ownership structure and audit quality: An empirical analysis considering ownership types in Jordan

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33 Citations (Scopus)
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This study provides up-to-date evidence concerning the different corporate ownership types and their effect on audit quality in Jordan, and by extension to other developing countries with similar institutional environments. Different types of shareholders have different investment policies and targets, which affects how they exercise their monitoring role over the investee firms. However, the literature suffers from a tight focus on overall ownership concentration, with less attention to identities of the shareholders. This focus motivates the study to go further and test whether the demand for audit quality varies across different ownership identities. This study sheds light on this relationship in one of the developing countries where investor protection is relatively weak and overall regulations remain underdeveloped. To obtain robust results, the study employs different estimation methods and scales audit fees according to firm size in order to reduce spurious correlations and heterogeneity of variance due to firm size. The results show the importance of family, banks, and government ownership in ensuring high audit quality. Conversely, ownership by non-financial institutions and foreigners does not affect audit quality. Beyond its contribution to the literature, this study offers useful feedback for regulatory bodies to consider ownership types during their deliberations, assists investors in making better-informed decisions, and benefits other interested parties in gaining a better understanding of the role played by ownership structure in audit quality. This feedback can also apply to other countries with ownership structures and regulatory frameworks similar to those in Jordan.

Original languageEnglish
Pages (from-to)71-84
Number of pages14
JournalJournal of International Accounting, Auditing and Taxation
Early online date20 May 2019
Publication statusPublished - Jun 2019

Bibliographical note

NOTICE: this is the author’s version of a work that was accepted for publication in Journal of International Accounting, Auditing and Taxation. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of International Accounting, Auditing and Taxation, 35 (2019)
DOI: 10.1016/j.intaccaudtax.2019.05.006

© 2019, Elsevier. Licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International


  • Audit quality
  • Family ownership
  • Foreign ownership
  • Government ownership
  • Institution ownership
  • Jordan
  • Ownership structure

ASJC Scopus subject areas

  • Accounting
  • Finance


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