Entrenchment Effect and Audit Quality in Family Business of Pakistan

• 발행기관: 한국유통과학회
• 저자명: Safdar Husain TAHIR Sadaf AKRAM Shahida PERVEEN Gulzar AHMAD Muhammad Rizwan ULLAH
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 7 No.8, 95~102쪽, 전체 8쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2020.08.30

영문 초록

he purpose of this study is to test both the alignment theory and entertainment theory on family firms listed on the Pakistan Stock Exchange. To achieve these goals, we collected secondary data from 164 non-financial family firms in various sectors during 2014-18. These family firms are classified into two categories: family control firms and family owned firms. We take the audit fee and the audit quality as dependent variables while family control firms, family-owned firms, and family CEOs as independent variables. In addition, the study uses leverage, profit and export as control variables. To test the effect of the explanatory variables on the output variables, we use two econometric models, Ordinary Least Square and the Probit regression model. In addition, Huber Sandwich test is used to check the nonnormality and heteroscedasticity of panel data. Contrary to the alignment effect, the study supports the entrenchment effect and advocates that family-controlled firms as well as family-owned firms are not conscientious regarding the selection of external auditors during their contracts with audit firms. They are less likely to pay high audit fees for good quality audit in Pakistan. Furthermore, the study shows a statistically significant and positive relationship between audit quality and audit fees.

목차

1. Introduction

2. Literature Review and Hypotheses

3. Research Methodology

4. Results and Discussions

5. Conclusions and Implications

References

키워드

Alignment Effect Family Firms Entrenchment Effect Audit Quality Audit Fee