Factors compromised the auditor independence: a study on the perception of Malaysia public listed companies / Norziana Lokman and Nur’atiqah Mohd Bakri

• Main Authors: Lokman, Norziana, Mohd Bakri, Nur’atiqah
• 格式: Book Section
• 语言: English
• 出版: Faculty of Accountancy 2019
• 主题: Auditing. Auditors; Internal auditing
• 在线阅读: http://ir.uitm.edu.my/id/eprint/43756/3/43756.pdf; http://ir.uitm.edu.my/id/eprint/43756/

One of the critical responsibilities of the auditor is to form an independent view of the company's financial performance in the auditor’s statement. In Malaysia, the issue of auditor independence has recently become prominent due to 1MDB scandal. For that reason, the focus of this study is to determine the factors that compromise auditor independence in Malaysian Publicly Listed Companies. This study has identified four main factors which perceived to affect auditor independence. They are audit fees, auditor tenure, auditor market competition, and non-audit services (NAS). This study aims to investigate the relationship between the four compromised factors over auditor independence. A set of questionnaires was developed and distributed among 280 accountants, financial Managers and chief financial officer (CFO) of Malaysia Public Listed Companies. Each respondent is required to assess the compromised factors that contribute to auditor independence using a “5 Likert-scale”. The data collected then were tested and analyzed using correlation and regression analysis. The findings of this study revealed that auditor tenure has positively and significantly influence the auditor independence. Meanwhile, other factors have no significant influence on auditor independence. This study contributes to the literature on the topic of auditor independence and provided further evidence that long auditor tenure can enhance the independence of auditors from the perspective of listed companies. Thus, the professional bodies, regulators, and policymakers should carefully consider the recommendation on the auditor rotation and audit firm rotation before making it mandatory.