Title: Determinants of auditor choice in Tunisian context

Authors: Mohamed Ali Omri; Hella Dellai

Addresses: Faculty of Economic Sciences and Management of Tunis, Campus Universitaire El Manar, B.P. 248 El Manar II, 2092, Tunis, Tunisia ' Institute of Higher Management of Tunis, Research Unit Finance and Strategy of Business, 41 Rue de la Liberte, Bouchoucha, Bardo 2000, Tunis, Tunisia

Abstract: The purpose of this article is to examine the association between the firms 'choice of external auditor and client firms' characteristics. We develop a logit regression model to test the impact of firms' characteristics on auditor choice decisions made by 27 listed companies in Tunisia during a period of 2005-2008. We find that firms with high investment opportunities and high level of organisational complexity are more likely to hire 'top 15' auditors. Further, firms with high leverage and high costs of disclosing proprietary information to competitors are less likely to hire 'top 15' auditors. The audit market in Tunisia presents an interesting field for the study of auditor choice, because there are a few empirical studies that examine auditor choice decisions in the emerging economies and because the simple dichotomous distinction between 'Big' and 'not Big' is unsuitable for the audit market in emerging countries. This study examines other determinants of auditor choice that have not been studied before in the Tunisian context and proposes a new typology of the audit quality in the Tunisian audit market.

Keywords: auditor choice; audit quality; Tunisian stock exchange; TSE; Tunisia; external auditors; auditing.

DOI: 10.1504/IJCA.2013.058691

International Journal of Critical Accounting, 2013 Vol.5 No.5, pp.502 - 517

Published online: 29 Apr 2014 *

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