The impact of corporate governance on auditor change decision

• Main Authors: Abidin, Shamharir, Ishaya, Ishaku Vandi, Mohamad Nor, Mohamad Naimi
• Format: Conference or Workshop Item
• Language: English
• Published: 2016
• Subjects: HD28 Management. Industrial Management; HF5601 Accounting
• Online Access: http://repo.uum.edu.my/20343/1/ISSC%202016%20545%20551.pdf; http://repo.uum.edu.my/20343/; http://doi.org/10.15405/epsbs.2016.08.77

Auditing plays a crucial role in corporate governance process and it has been shown to increase the reliability and quality of an organization’s financial statements.Understanding the reasons why companies change their auditor is very important as it could inhibit the flow of capital in the securities markets and subsequently, increase the capital costs.The present study seeks to examine the impact of corporate governance on auditor change decision. Based on the analysis of 712 non-financial companies listed on Bursa Malaysia during the period from 31st December, 2009 to 2011, the results suggest that board independence, non-audit service, changes in management, company size and Big 4 are significant determinants of auditor change. The outcome of the study indicates the impact of sound governance on auditor change decision and might provide insightful knowledge which helps shareholders to realize the importance of having balance BODs.