Title: The effect of corporate governance mechanisms on audit quality: evidence from the UK FTSE-350 listed companies

Authors: Ahmad Mohammed Qotba; Bilal Ahmad Elsalem; Fekri Ali Shawtari

Addresses: Department of Accounting and Information Systems, Qatar University, Doha, Qatar ' Department of Accounting and Information Systems, Qatar University, Doha, Qatar ' Management Sciences Division, Management Department, Community College of Qatar, Doha, Qatar

Abstract: Corporate governance has received wider attention from society and legislators demanding more solid corporate governance. Simultaneously, audit quality has received increasing attention as it is considered a crucial part of corporate governance. This study investigated corporate governance and audit quality using the sample of FTSE-350 companies from the period of 2014-2019. The variables that were included as corporate governance aspects were board independence, board diversity and audit committee effectiveness and audit quality proxy was audit fees. The result of this study is consistent with many auditing studies that suggest indeed corporate governance mechanisms can affect audit quality. Board independence is negatively associated with audit fees, while board diversity and audit committee effectiveness are significantly, positively associated with audit fees. The results are important for regulators to improve the governance mechanisms and introduce more solid rules in order to preserve financial statement integrity and a clean audit opinion. This paper contributes to the overall corporate governance literature, specifically in the effect of women on the board of directors on audit quality.

Keywords: corporate governance; audit quality; audit fees; FTSE-350; the UK.

DOI: 10.1504/IJAF.2023.138967

International Journal of Accounting and Finance, 2023 Vol.11 No.4, pp.245 - 266

Received: 11 May 2022
Received in revised form: 05 Feb 2023
Accepted: 06 Sep 2023
Published online: 05 Jun 2024 *

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