The effect of director-auditor link on non-audit services fee

• Main Authors: Malik @ Malek, Mazrah, Che Ahmad, Ayoib
• Format: Article
• Language: English
• Published: Universiti Putra Malaysia Press 2013
• Online Access: http://psasir.upm.edu.my/id/eprint/28364/1/28364.pdf; http://psasir.upm.edu.my/id/eprint/28364/; http://www.pertanika.upm.edu.my/Pertanika%20PAPERS/JSSH%20Vol.%2021%20%28S%29%20Oct.%202013/05%20Page%2071-84.pdf

Despite concerns on joint-provision of audit and non-audit services, not many studies have been conducted on examining the factors influencing companies to purchase non-audit services from their auditor. The attachment theory postulates that non-audit services purchasing decisions are influenced by the director-auditor link. Using 759 sample companies listed on Bursa Malaysia in 2007, the OLS regression results show a significant positive relationship between director-auditor link and non-audit services fee. The finding adds to the limited literature on the factors influencing companies to purchase non-audit services from their auditor and suggests the need for active involvement of shareholders in the auditor selection process.