Auditor Switching Among Malaysian Second Board Companies
The auditor switching phenomenon has been widely studied in the developed countries by academicians, accounting professionals and industry experts because of its implication to value credibility of financial reporting and the cost of monitoring management activities. Despite the growing concerns...
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2002
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| Online Access: | http://psasir.upm.edu.my/id/eprint/8316/1/FEP_2002_14_IR.pdf |
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my-upm-ir.83162024-01-05T07:35:36Z Auditor Switching Among Malaysian Second Board Companies 2002-11 Ismail, Shahnaz The auditor switching phenomenon has been widely studied in the developed countries by academicians, accounting professionals and industry experts because of its implication to value credibility of financial reporting and the cost of monitoring management activities. Despite the growing concerns on this issue, few studies appear to have been made in Malaysia to examine the significant reasons and to estimate the shareholders' wealth effect. Thus the objectives of this study are (a) to identify the determinants of auditor switch among companies listed on Second Board of KLSE and (b) to examine the wealth effect of investors due to auditor switch. The period of study is from 1990 to 1999. During this period, there were about 297 companies listed on Second Board and 46 companies involved in auditor switch. This study uses two models namely, logistic regression model and event study method to examine the determinants of auditor switch and its wealth effect. The findings indicate that qualified audit report, audit fee, sale growth, return on asset and longevity of audit engagement, were the determinants of auditor switching. Using the event study method, the findings on the investors reaction surrounding the announcement date indicate that investors on average reacted positively to auditor switch in general with a significant positive excess return at switched date. The findings also indicate that investors reacted positively towards switching from Tier2 to Tier! and negatively towards switching involving Tierl to Tier2 auditor. Further results show that during the financial crisis of 1997, switching (either to Tierl or Tier2) has no significant impact on shareholder's wealth. Investments - Case studies - Kuala Lumpur. Stockholders - Case studies - Kuala Lumpur. 2002-11 Thesis http://psasir.upm.edu.my/id/eprint/8316/ http://psasir.upm.edu.my/id/eprint/8316/1/FEP_2002_14_IR.pdf text en public masters Universiti Putra Malaysia Investments - Case studies - Kuala Lumpur. Stockholders - Case studies - Kuala Lumpur. Faculty of Economics and Management Md. Nassir, Annuar English |
| institution |
Universiti Putra Malaysia |
| collection |
PSAS Institutional Repository |
| language |
English English |
| advisor |
Md. Nassir, Annuar |
| topic |
Investments - Case studies - Kuala Lumpur. Stockholders - Case studies - Kuala Lumpur. |
| spellingShingle |
Investments - Case studies - Kuala Lumpur. Stockholders - Case studies - Kuala Lumpur. Ismail, Shahnaz Auditor Switching Among Malaysian Second Board Companies |
| description |
The auditor switching phenomenon has been widely studied in the developed
countries by academicians, accounting professionals and industry experts because
of its implication to value credibility of financial reporting and the cost of
monitoring management activities. Despite the growing concerns on this issue, few
studies appear to have been made in Malaysia to examine the significant reasons
and to estimate the shareholders' wealth effect. Thus the objectives of this study
are (a) to identify the determinants of auditor switch among companies listed on
Second Board of KLSE and (b) to examine the wealth effect of investors due to
auditor switch. The period of study is from 1990 to 1999. During this period,
there were about 297 companies listed on Second Board and 46 companies involved
in auditor switch. This study uses two models namely, logistic regression model
and event study method to examine the determinants of auditor switch and its
wealth effect. The findings indicate that qualified audit report, audit fee, sale
growth, return on asset and longevity of audit engagement, were the determinants of auditor switching. Using the event study method, the findings on the investors
reaction surrounding the announcement date indicate that investors on average
reacted positively to auditor switch in general with a significant positive excess
return at switched date. The findings also indicate that investors reacted positively
towards switching from Tier2 to Tier! and negatively towards switching involving
Tierl to Tier2 auditor. Further results show that during the financial crisis of 1997,
switching (either to Tierl or Tier2) has no significant impact on shareholder's
wealth. |
| format |
Thesis |
| qualification_level |
Master's degree |
| author |
Ismail, Shahnaz |
| author_facet |
Ismail, Shahnaz |
| author_sort |
Ismail, Shahnaz |
| title |
Auditor Switching Among Malaysian Second Board Companies |
| title_short |
Auditor Switching Among Malaysian Second Board Companies |
| title_full |
Auditor Switching Among Malaysian Second Board Companies |
| title_fullStr |
Auditor Switching Among Malaysian Second Board Companies |
| title_full_unstemmed |
Auditor Switching Among Malaysian Second Board Companies |
| title_sort |
auditor switching among malaysian second board companies |
| granting_institution |
Universiti Putra Malaysia |
| granting_department |
Faculty of Economics and Management |
| publishDate |
2002 |
| url |
http://psasir.upm.edu.my/id/eprint/8316/1/FEP_2002_14_IR.pdf |
| _version_ |
1794018739353550848 |