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Voluntary demand for auditing by farm businesses: an Australian perspective
journal contribution
posted on 2013-01-01, 00:00 authored by Peter CareyPeter Carey, George TanewskiGeorge TanewskiThis 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.
History
Journal
Accounting and management information systemsVolume
12Issue
2Pagination
213 - 234Publisher
Bucharest Academy of Economic StudiesLocation
Bucharest, RomaniaISSN
1843-8105Language
engPublication classification
C1 Refereed article in a scholarly journalCopyright notice
2013, Bucharest Academy of Economic StudiesUsage metrics
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