Auditor change in Malaysia: the influence of ethnicity, audit, client firm and auditor characteristics
Date of Award
Doctor of Philosophy
School of Accounting and Finance
Business and Law
PROFESSOR MALCOLM SMITH
DR. ZUBAIDAH ISMAIL
Auditing has an important role to play in the corporate governance process and is essential in ensuring confidence in the reliability of financial information. Given the costs involved, it is important to understand the reasons why companies change their auditor and choose a particular level of audit assurance. To date, however, only a limited number of studies on auditor change and the nature of change issues have been conducted, none of these in a Malaysian setting. Further, since the demise of Arthur Andersen, the audit market environment has changed significantly, creating a new research domain. In light of these recent developments, the objectives of this study are to address both auditor change and the nature of change issues. This study investigates two aspects of the Malaysian listed company auditor changes, namely the factors which influence auditor change and the nature of change. The first part deals with factors which influence auditor change, notably audit and client firms’ characteristics for the Malaysian listed company. Logistic regression analysis was used to explain the factors impacting on audit change and to examine the sensitivity of results to alternative period measurement and proxies of the basic model specification. Subsequently, the nature of change, in particular are address: changes of audit firm from a Big-4 audit firm to another Big-4 audit firm; from a non Big-4 audit firm to a Big-–4 audit firm; from a Big-4 audit firm to a non Big-4 audit firm; and from a non Big-4 audit firm to another non Big-4 audit firm. Two auditor characteristics are adopted: auditor ethnicity and auditor quality and three proxies of audit quality are adopted: brand name, specialist auditor and audit firm size. Logistic regression analysis and multinomial regression analysis were used to evaluate alternative models of the change process.
Nazatul Faiza Syed Mustapha Nazri, Sharifah, "Auditor change in Malaysia: the influence of ethnicity, audit, client firm and auditor characteristics" (2011). Theses: Doctorates and Masters. Paper 376.