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Audit fees, auditor choice and stakeholder influence: Evidence from a family-firm dominated economy

journal contribution
posted on 2015-01-01, 00:00 authored by Arifur KhanArifur Khan, Mohammad MuttakinMohammad Muttakin, J Siddiqui
Despite the dominance of family-owned publicly listed companies in developing economies, prior research has paid relatively little attention to this area and the socio-economic context of these countries has been mostly ignored. This study contributes to the accounting literature by providing empirical evidence of the effects of family control and ownership on audit pricing and auditor choice in a developing economy context. Using 1058 firm-year observations of publicly listed companies in Bangladesh, where family firms are the most dominant form of public companies, we find that in comparison with non-family firms, our sample family firms pay significantly lower audit fees and choose lower quality auditors. However, for export-oriented industries, family firms seem to pay significantly higher audit fees and recruit better quality auditors compared to non-family firms. Collectively, our findings have important implications for audit markets in emerging economies in which the sustainability of family firms is crucial for overall economic development.

History

Journal

British accounting review

Volume

47

Issue

3

Pagination

304 - 320

Publisher

Academic Press

Location

Amsterdam, The Netherlands

ISSN

0890-8389

eISSN

1095-8347

Language

eng

Publication classification

C Journal article; C1 Refereed article in a scholarly journal

Copyright notice

2015, Elsevier