Corporate Governance and Auditor Choice Among Companies in GCC Countries

This thesis examines two separate studies—auditor change and auditor selection determinants among public listed companies in the Gulf Cooperation Council(GCC) for the period of 2005-2010. The models were developed using the frameworks of the agency theory, the managerial grid theory, the attraction-...

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Main Author:	Aljaaidi, Khaled Salmen Yaslam
Format:	Thesis
Language:	eng eng
Published:	2013
Subjects:	HD2709-2930.7 Corporations
Online Access:	https://etd.uum.edu.my/3809/1/s92494.pdf https://etd.uum.edu.my/3809/7/s92494.pdf
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id	my-uum-etd.3809
record_format	uketd_dc
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
advisor	Abidin, Shamharir Abdul Manaf, Nor Aziah
topic	HD2709-2930.7 Corporations
spellingShingle	HD2709-2930.7 Corporations Aljaaidi, Khaled Salmen Yaslam Corporate Governance and Auditor Choice Among Companies in GCC Countries
description	This thesis examines two separate studies—auditor change and auditor selection determinants among public listed companies in the Gulf Cooperation Council(GCC) for the period of 2005-2010. The models were developed using the frameworks of the agency theory, the managerial grid theory, the attraction-selection-attrition framework and the information suppression hypothesis to examine the associations of three categories of determinants with the decisions of auditor change and selection. The first category of determinants is the corporate governance mechanisms: board of directors’ effectiveness score (board of directors independence, size, financial expertise, meetings, nationality, international experience and CEO duality), audit committee’s effectiveness score (audit committee independence, size, financial expertise, meetings, nationality and international experience), government ownership, family ownership, and domestic corporate ownership. The second category of determinant is the audit-specific characteristic: audit fee. The third category of determinants is the firm-specific characteristics: firm size, leverage, firm performance, and management change. For the auditor change model, the results show that the board of directors’ effectiveness score, family ownership, firm size, and leverage are significantly associated with the incidence of auditor change. As for the auditor selection model, the results indicate that the family ownership, domestic corporate ownership, audit fees, firm performance, and management change are significantly related to audit quality. This study finds that the economic and the behavioral issues are related to audit demand in GCC. Additionally, the study suggests that regulators, especially the GCC stock exchanges, should mandate companies to disclose all relevant information related to auditor change in a transparent and timely manner, and increase law enforcement to enhance good corporate governance practices. For companies, this study proposes that they should emphasize more on enhancing the role and the quality of the board of directors and the audit committee members, as they are involved in the both decisions of auditor change and selection.
format	Thesis
qualification_name	Ph.D.
qualification_level	Doctorate
author	Aljaaidi, Khaled Salmen Yaslam
author_facet	Aljaaidi, Khaled Salmen Yaslam
author_sort	Aljaaidi, Khaled Salmen Yaslam
title	Corporate Governance and Auditor Choice Among Companies in GCC Countries
title_short	Corporate Governance and Auditor Choice Among Companies in GCC Countries
title_full	Corporate Governance and Auditor Choice Among Companies in GCC Countries
title_fullStr	Corporate Governance and Auditor Choice Among Companies in GCC Countries
title_full_unstemmed	Corporate Governance and Auditor Choice Among Companies in GCC Countries
title_sort	corporate governance and auditor choice among companies in gcc countries
granting_institution	Universiti Utara Malaysia
granting_department	Othman Yeop Abdullah Graduate School of Business
publishDate	2013
url	https://etd.uum.edu.my/3809/1/s92494.pdf https://etd.uum.edu.my/3809/7/s92494.pdf
_version_	1747827650740617216
spelling	my-uum-etd.38092022-04-10T02:40:11Z Corporate Governance and Auditor Choice Among Companies in GCC Countries 2013-06 Aljaaidi, Khaled Salmen Yaslam Abidin, Shamharir Abdul Manaf, Nor Aziah Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HD2709-2930.7 Corporations This thesis examines two separate studies—auditor change and auditor selection determinants among public listed companies in the Gulf Cooperation Council(GCC) for the period of 2005-2010. The models were developed using the frameworks of the agency theory, the managerial grid theory, the attraction-selection-attrition framework and the information suppression hypothesis to examine the associations of three categories of determinants with the decisions of auditor change and selection. The first category of determinants is the corporate governance mechanisms: board of directors’ effectiveness score (board of directors independence, size, financial expertise, meetings, nationality, international experience and CEO duality), audit committee’s effectiveness score (audit committee independence, size, financial expertise, meetings, nationality and international experience), government ownership, family ownership, and domestic corporate ownership. The second category of determinant is the audit-specific characteristic: audit fee. The third category of determinants is the firm-specific characteristics: firm size, leverage, firm performance, and management change. For the auditor change model, the results show that the board of directors’ effectiveness score, family ownership, firm size, and leverage are significantly associated with the incidence of auditor change. As for the auditor selection model, the results indicate that the family ownership, domestic corporate ownership, audit fees, firm performance, and management change are significantly related to audit quality. This study finds that the economic and the behavioral issues are related to audit demand in GCC. Additionally, the study suggests that regulators, especially the GCC stock exchanges, should mandate companies to disclose all relevant information related to auditor change in a transparent and timely manner, and increase law enforcement to enhance good corporate governance practices. For companies, this study proposes that they should emphasize more on enhancing the role and the quality of the board of directors and the audit committee members, as they are involved in the both decisions of auditor change and selection. 2013-06 Thesis https://etd.uum.edu.my/3809/ https://etd.uum.edu.my/3809/1/s92494.pdf text eng public https://etd.uum.edu.my/3809/7/s92494.pdf text eng public Ph.D. doctoral Universiti Utara Malaysia Abbott, L., & Parker, S. (2000). Auditor selection and audit committee characteristics. Auditing, 19(2), 47-66. Abdel-Halim, A., & Ashour, A. (1995). Early employment and mobility behaviors of business graduates in the Arab Gulf region. International Studies of Management and Organization , 25, 67-67. Abdel-Khalik, A. (1993)Why do private companies demand auditing? A case for organizational loss of control. Journal of Accounting Auditing and finance, 8(1), 31-52. Abdul-Gader, A. (1997). 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