Director-auditor link and audit quality: the simultaneous effect of auditor-director attachment on audit fees, non-audit services and audit opinion
Director-Auditor Link and Audit Quality aims to examine the effects of director-auditor link on audit services fee, non-audit services fee and audit opinion. Based on the attachment theory, it is argued that director-auditor link created by interlocking directorates enhances the mutual dependence an...
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| Main Author: | |
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| Format: | Book |
| Language: | English English |
| Published: |
LAP Lambert Academic Publishing
2012
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| Online Access: | http://psasir.upm.edu.my/id/eprint/32891/1/director%20auditor.pdf http://psasir.upm.edu.my/id/eprint/32891/2/synopsis-director.pdf http://psasir.upm.edu.my/id/eprint/32891/ |
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| Summary: | Director-Auditor Link and Audit Quality aims to examine the effects of director-auditor link on audit services fee, non-audit services fee and audit opinion. Based on the attachment theory, it is argued that director-auditor link created by interlocking directorates enhances the mutual dependence and trust between the directors and their auditor and this mutuality is expected to influence audit services fee, non-audit services purchased from auditor and audit opinion. Analyses are conducted using data of 759 listed companies on the Bursa Malaysia in 2007 and a two-stage regression method is employed to accommodate the simultaneous equation model. The results show that director-auditor link has a significant negative relationship with audit services fee and significant positive relationships with non-audit services fee purchased from auditor and the issuance of unqualified audit opinion. Thus, the results provide initial evidence on the importance of reviewing the director-auditor link practices in the business environment. |
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