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Voluntary demand for auditing by farm businesses: an Australian perspective

Carey, Peter and Tanewski, George 2013, Voluntary demand for auditing by farm businesses: an Australian perspective, Accounting and management information systems, vol. 12, no. 2, pp. 213-234.

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Title Voluntary demand for auditing by farm businesses: an Australian perspective
Author(s) Carey, Peter
Tanewski, George
Journal name Accounting and management information systems
Volume number 12
Issue number 2
Start page 213
End page 234
Total pages 22
Publisher Bucharest Academy of Economic Studies
Place of publication Bucharest, Romania
Publication date 2013
ISSN 1843-8105
Keyword(s) agency theory
auditing standards
budgeting
farming
planning
small business
Summary  This study investigates voluntary demand for auditing by Australian farm businesses, a significant but relatively unexplored segment of the economy. Most farms operate as family partnerships or sole proprietors and we thus focus on incentives to audit arising from internal sources (owner-manager), controlling for traditional incentives arising from external contractual constraints (i.e., debt), organisational characteristics (i.e., size), and agency conflict. We hypothesise that an external audit assists management in enhancing internal control by complementing the process of profit planning and control (budgeting) and that increased family conflict provides an incentive to engage external audit. Of the 457 survey questionnaire respondents, 27% voluntarily engage an external auditor and 66% conduct some formal written planning. Results from logistic regression analyses support the predicted impact of both size and debt on audit, and further support the hypothesised impact of budgeting. The positive association between budgeting and audit confirms the complementary relationship. More importantly, this relationship is not confounded by the combined impact of size and budgeting and debt and budgeting on voluntary audit. In addition, family conflict has no impact on voluntary demand for auditing by farm business.
Language eng
Field of Research 150102 Auditing and Accountability
150199 Accounting, Auditing and Accountability not elsewhere classified
Socio Economic Objective 909999 Commercial Services and Tourism not elsewhere classified
HERDC Research category C1 Refereed article in a scholarly journal
Copyright notice ©2013, Bucharest Academy of Economic Studies
Persistent URL http://hdl.handle.net/10536/DRO/DU:30054919

Document type: Journal Article
Collections: School of Accounting, Economics and Finance
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Every reasonable effort has been made to ensure that permission has been obtained for items included in DRO. If you believe that your rights have been infringed by this repository, please contact drosupport@deakin.edu.au.