Auditor choice and institutional investor characteristics after the Enron scandal in the French context Online publication date: Tue, 21-Oct-2014
by Jamel Azibi, Hubert Tondeur, Mohamed Tahar Rajhi
International Journal of Economics and Accounting (IJEA), Vol. 2, No. 1, 2011
Abstract: This study examines the association between the quality of audit and the characteristics of institutional investors, using French data. After the Enron scandal, the perception of the Big 4 by French institutional investors changed. Our first hypothesis focuses on the relation between French institutional investors and the choice of Big 4 auditors. Our second hypothesis deals with the perception of the foreign institutional investors to choose one of the Big 4 auditors due to the lack of investor protection in France and the failure of Enron. We tested our hypotheses on a sample of 144 companies listed on SBF 250, obtained from Worldscope data between 2000 and 2007. Empirical results show a negative and statistically significant link between the choices of one of Big 4 auditor by French institutional investors after the Enron scandal, whereas there is a positive and statistically insignificant link between the foreign institutional investor and the Big 4 appointment after 2002.
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