An investigation into the effect of audit firm size, auditor tenure, institutional ownership, board characteristics on auditor independence
by Khaldoon Ahmad Al Daoud
International Journal of Management Practice (IJMP), Vol. 13, No. 4, 2020

Abstract: The independence of an auditor is a crucial issue because of its potential impact on audit quality. This study examines the effect of audit firm size, auditor tenure, institutional ownership, board independence, and board diversity on the audit quality. The sample comprised 52 listed service firms on the Jordanian Stock Exchange, whose data were obtained for the years from 2013 to 2016, and 208 firm-year observations were involved in the analyses process. In this study, auditor independence served as the proxy for audit quality. The results reveal that audit firm size and institutional owners and board independence significantly and positively influence audit quality. The results reveal that companies with a higher proportion of institutional ownership and independent members of the board and being audited by a Big 4 firm are more likely to maintain the independence of the external auditor. However, auditor tenure and board diversity had no significant relationship with auditor independence. The results could be useful for the management of companies that are interested in enhancing the quality of audit work in their companies.

Online publication date: Wed, 08-Jul-2020

The full text of this article is only available to individual subscribers or to users at subscribing institutions.

 
Existing subscribers:
Go to Inderscience Online Journals to access the Full Text of this article.

Pay per view:
If you are not a subscriber and you just want to read the full contents of this article, buy online access here.

Complimentary Subscribers, Editors or Members of the Editorial Board of the International Journal of Management Practice (IJMP):
Login with your Inderscience username and password:

Username:        Password:          Forgotten your password?

Want to subscribe?
A subscription gives you complete access to all articles in the current issue, as well as to all articles in the previous three years (where applicable). See our Orders page to subscribe.

If you still need assistance, please email subs@inderscience.com