Effects of audit committee chair characteristics on auditor choice,audit fee and audit quality |
| |
| Authors: | Masoud Azizkhani Sarowar Hossain Mai Nguyen |
| |
| Institution: | 1. Tasmanian Audit Office, Hobart, Tasmania, Australia;2. School of Accounting, Auditing and Taxation, UNSW Business School, UNSW Sydney, Sydney, New South Wales, Australia;3. Tasmanian School of Business and Economic, University of Tasmania, Hobart, Tasmania, Australia |
| |
| Abstract: | We investigate whether the characteristics of audit committee (AC) chairs are associated with decisions about auditor choice, audit fees and audit quality. Using hand-collected Australian data, firms with AC chairs who have longer tenure and multiple AC memberships across several boards are found to be more likely to choose Big 4 and/or industry specialist auditors, pay higher audit fees and have lower discretionary accruals. Those AC chairs with higher business qualifications are more likely to hire a Big 4 auditor, pay higher audit fees and have lower discretionary accruals, while AC chairs with professional qualifications are more likely to hire a Big 4 and/or industry specialist auditor. In contrast, firms with AC chairs who are executive directors are less likely to hire a Big 4 auditor and have higher discretionary accruals. Our findings contribute to the literature by documenting that various characteristics of AC chairs are important for enhancement of auditor selection and audit quality. |
| |
| Keywords: | audit committee chair audit fees audit quality auditor choice financial expertise gender multiple audit committee membership |
|
|
