Corporate governance and audit features

SMEs evidence

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

Purpose
The purpose of this paper is to investigate the effect of corporate governance factors on audit features, namely, audit fees and the selection of Big 4 audit firms within the UK SMEs context.

Design/methodology/approach
The author uses different regression models to investigate the impact of corporate governance characteristics on audit features, and employs cross-sectional time series models as well as two-stage least squares technique. In addition, the author has used logit analysis to examine the effect of corporate governance factors on the selection of Big 4 audit firms.

Findings
The author provides new evidence that governance mechanisms in SMEs affect different audit features. The results show that corporate governance mechanisms are important in determining audit fees. The author detects a positive impact of board independence, audit meeting and board size on audit fees. The author also reports evidence that governance factors determine the selection of Big 4 audit firms. In particular, the author reports that independent directors and audit diligence positively affect the decision to select Big 4 audit firms.

Originality/value
This paper investigates the under-researched relationship between audit features and corporate governance using UK SMEs. In so doing, the author aims to provide new insights into this relationship within the SMEs context.
Original languageEnglish
Pages (from-to)163-179
Number of pages17
JournalJournal of Small Business and Enterprise Development
Volume25
Issue number1
DOIs
Publication statusPublished - 12 Feb 2018

Fingerprint

Corporate governance
Small and medium-sized enterprises
Audit
Big 4
Audit firms
Factors
Audit fees
Design methodology
Two-stage least squares
Independent directors
Governance mechanisms
Regression model
Time series models
Board independence
Governance
Board size
Logit analysis
Corporate governance mechanisms

Cite this

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abstract = "PurposeThe purpose of this paper is to investigate the effect of corporate governance factors on audit features, namely, audit fees and the selection of Big 4 audit firms within the UK SMEs context.Design/methodology/approachThe author uses different regression models to investigate the impact of corporate governance characteristics on audit features, and employs cross-sectional time series models as well as two-stage least squares technique. In addition, the author has used logit analysis to examine the effect of corporate governance factors on the selection of Big 4 audit firms.FindingsThe author provides new evidence that governance mechanisms in SMEs affect different audit features. The results show that corporate governance mechanisms are important in determining audit fees. The author detects a positive impact of board independence, audit meeting and board size on audit fees. The author also reports evidence that governance factors determine the selection of Big 4 audit firms. In particular, the author reports that independent directors and audit diligence positively affect the decision to select Big 4 audit firms.Originality/valueThis paper investigates the under-researched relationship between audit features and corporate governance using UK SMEs. In so doing, the author aims to provide new insights into this relationship within the SMEs context.",
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Corporate governance and audit features : SMEs evidence. / Al-najjar, Basil.

In: Journal of Small Business and Enterprise Development, Vol. 25, No. 1, 12.02.2018, p. 163-179.

Research output: Contribution to journalArticle

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T2 - SMEs evidence

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