Engagement risk, auditor choice and audit fee in the Malaysian audit market

High risk of auditor litigation and audit market competitiveness motivate audit firms to place greater emphasis on the role of engagement risk in determining client-auditor relationship and audit cost (Johnstone, 2000; Johnstone & Bedard, 2004). Based on this development, this study examines...

Full description

Saved in:

Bibliographic Details
Main Author:	Mohamad Naimi, Mohamad Nor
Format:	Thesis
Language:	eng eng
Published:	2015
Subjects:	HF5601-5689 Accounting
Online Access:	https://etd.uum.edu.my/5298/1/s92786.pdf https://etd.uum.edu.my/5298/2/s92786_abstract.pdf
Tags:	Add Tag No Tags, Be the first to tag this record!

id	my-uum-etd.5298
record_format	uketd_dc
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng
advisor	Abidin, Shamharir Ahmad Zaluki, Nurwati Ashikkin
topic	HF5601-5689 Accounting HF5601-5689 Accounting
spellingShingle	HF5601-5689 Accounting HF5601-5689 Accounting Mohamad Naimi, Mohamad Nor Engagement risk, auditor choice and audit fee in the Malaysian audit market
description	High risk of auditor litigation and audit market competitiveness motivate audit firms to place greater emphasis on the role of engagement risk in determining client-auditor relationship and audit cost (Johnstone, 2000; Johnstone & Bedard, 2004). Based on this development, this study examines the market structure and the impact of engagement risk on auditor choice and audit pricing in a low litigation risk setting. Drawing from the agency theory and its related hypotheses, the study anticipates that audit risk, auditor business risk and client business risk are significantly associated with auditor choice and audit fee. The samples of study consist of Malaysian public listed companies from 2008 to 2010. The descriptive analysis of 2,854 companies demonstrates that the Malaysian audit market can be described as a tight oligopoly. In determining the influence of risk on auditor choice and audit fee, some exclusion criteria were established. Using panel data analysis on 2,451 companies, it is found that engagement risk significantly influences auditor choice and audit fee. In particular, auditor business risk is more important than the other risks in auditor choice and it is positively associated with the choice of quality auditor whereas, audit risk elements are more dominant than the other risk factors in explaining audit fee. Auditors will charge higher audit fees for clients with higher audit risks. The engagement risk affects auditor choice and audit fee differently because of the different risk management practices by audit firms in establishing their client portfolio. Avoidance of small and risky clients among large audit firms would increase companies’ difficulty to access the capital market and delay growth. This study contributes to the auditing literature by addressing the audit firm’s risk management strategy in Malaysia, which is rarely investigated. The study also provides an insight into the regulator on factors that should be considered in enhancing the quality of an audit firm
format	Thesis
qualification_name	Ph.D.
qualification_level	Doctorate
author	Mohamad Naimi, Mohamad Nor
author_facet	Mohamad Naimi, Mohamad Nor
author_sort	Mohamad Naimi, Mohamad Nor
title	Engagement risk, auditor choice and audit fee in the Malaysian audit market
title_short	Engagement risk, auditor choice and audit fee in the Malaysian audit market
title_full	Engagement risk, auditor choice and audit fee in the Malaysian audit market
title_fullStr	Engagement risk, auditor choice and audit fee in the Malaysian audit market
title_full_unstemmed	Engagement risk, auditor choice and audit fee in the Malaysian audit market
title_sort	engagement risk, auditor choice and audit fee in the malaysian audit market
granting_institution	Universiti Utara Malaysia
granting_department	Othman Yeop Abdullah Graduate School of Business
publishDate	2015
url	https://etd.uum.edu.my/5298/1/s92786.pdf https://etd.uum.edu.my/5298/2/s92786_abstract.pdf
_version_	1747827902803607552
spelling	my-uum-etd.52982021-04-04T07:41:57Z Engagement risk, auditor choice and audit fee in the Malaysian audit market 2015 Mohamad Naimi, Mohamad Nor Abidin, Shamharir Ahmad Zaluki, Nurwati Ashikkin Othman Yeop Abdullah Graduate School of Business Othman Yeop Abdullah Graduate School of Business HF5601-5689 Accounting HF5667 Professional Ethics. Auditors. High risk of auditor litigation and audit market competitiveness motivate audit firms to place greater emphasis on the role of engagement risk in determining client-auditor relationship and audit cost (Johnstone, 2000; Johnstone & Bedard, 2004). Based on this development, this study examines the market structure and the impact of engagement risk on auditor choice and audit pricing in a low litigation risk setting. Drawing from the agency theory and its related hypotheses, the study anticipates that audit risk, auditor business risk and client business risk are significantly associated with auditor choice and audit fee. The samples of study consist of Malaysian public listed companies from 2008 to 2010. The descriptive analysis of 2,854 companies demonstrates that the Malaysian audit market can be described as a tight oligopoly. In determining the influence of risk on auditor choice and audit fee, some exclusion criteria were established. Using panel data analysis on 2,451 companies, it is found that engagement risk significantly influences auditor choice and audit fee. In particular, auditor business risk is more important than the other risks in auditor choice and it is positively associated with the choice of quality auditor whereas, audit risk elements are more dominant than the other risk factors in explaining audit fee. Auditors will charge higher audit fees for clients with higher audit risks. The engagement risk affects auditor choice and audit fee differently because of the different risk management practices by audit firms in establishing their client portfolio. Avoidance of small and risky clients among large audit firms would increase companies’ difficulty to access the capital market and delay growth. This study contributes to the auditing literature by addressing the audit firm’s risk management strategy in Malaysia, which is rarely investigated. The study also provides an insight into the regulator on factors that should be considered in enhancing the quality of an audit firm 2015 Thesis https://etd.uum.edu.my/5298/ https://etd.uum.edu.my/5298/1/s92786.pdf text eng public https://etd.uum.edu.my/5298/2/s92786_abstract.pdf text eng public Ph.D. doctoral Universiti Utara Malaysia Abbott, L. J., & Parker, S. (2000). Auditor selection and audit committee characteristics. Auditing: A Journal of Practice and Theory, 19(2), 47-66. Abbott, L. J., Gunny, K., & Tracey, C. (2013). When the PCAOB talks, who listens? Evidence from stakeholder reaction to GAAP-deficient PCAOB inspection reports of small auditors. Auditing: A Journal of Practice and Theory, 32(2), 1-31. Abbott, L. J., Parker, S., & Peters, G. F. (2010). Serving two masters: The association between audit committee internal audit oversight and internal audit activities. Accounting Horizons, 24(1), 1-24. Abbott, L. J., Parker, S., Peters, G. F., & Raghunandan, K. (2003). The association between audit committee characteristics and audit fees. Auditing: A Journal of Practice and Theory, 22(2), 17-32. Abbott, L. J., Parker, S., Peters, G. F., & Rama, D. V. (2007). Corporate governance, audit quality, and the Sarbanes-Oxley Act: Evidence from internal audit outsourcing. The Accounting Review, 82(4), 803-835. Abdel-Khalik, A. R. (1990). The jointness of audit fees and demand for MAS: A selfselection analysis. Contemporary Accounting Research, 6 (2), 295-322. Abdul Nasser, A. T., Abdul Wahid, E., Syed Mustapha Nazri, S. N. F., & Hudaib, M. (2008). Auditor-client relationship: The case of audit tenure and auditor switching in Malaysia. Managerial Auditing Journal, 21(7), 724-737. Abdul Rahman, R., Abdul Wahab, E. A., & Mat Zain, M. (2010). Political connections: A threat to auditor independence. Paper presented at the Accounting & Finance Association of Australia and New Zealand Conference. 4 -6 July, Christchurch, New Zealand. Retrieved on 12 April 2011 from 297 http://www.afaanz.org/openconf/2010/modules/request.php?module=oc_progra m&action=view.php&id=296. Abdul Wahab, E.A., & Zain, M.Z. (2013). Audit fees during initial engagement in Malaysia. Managerial Auditing Journal, 28(8), 735-754. Abdul Wahab, E. A., Mat Zain, M., James, K., & Haron, H. (2009). Institutional investors, political connection and audit quality in Malaysia. Accounting Research Journal, 22(2), 167-195. Abdul Wahab, E.A., Mat Zain, M., & James, K. (2011a). Political connections, corporate governance and audit fees in Malaysia, Managerial Auditing Journal, 26(5), 393 - 418. Abdul Wahab E.A., Mat Zain, M. & James, K. (2011b). Audit fees in Malaysia: Does corporate governance matter? Asian Academy of Management Journal of Accounting and Finance, 7(1), 1–27. Abdullah, S. N., Mohamad Yusof, N. Z., & Mohamad Nor, M. N. (2010). Financial restatements and corporate governance among Malaysian listed companies. Managerial Auditing Journal, 25(6), 526-552. Abidin, S. (2006). Audit market concentration and auditor choice in the UK. PhD thesis, University of Stirling. Abidin, S., Beattie, V., & Goodacre, A. (2010). Audit market structure, fees and choice in a period of structural change: Evidence from the UK - 1998 -2003. British Accounting Review, 42(3), 187-206. Abu Bakar, N. B., & Ahmad, M. (2009). Auditor independence: Malaysian accountants' perception. International Journal of Business Management, 4(12), 129-141. 298 Abu Bakar, N. B., Abdul Rahman, A. R., & Abdul Rashid, H. M. (2005). Factors influencing auditor independence: Malaysian loan officers' perceptions. Managerial Auditing Journal, 20(8), 804-822. Adams, F. G., Bedard, J. C., & Johnstone, K. M. (2005). Information asymmetry and competitive bidding in auditing. Economic Inquiry, 43(2), 417-425. Adelopo, I. (2009). Modelling issues in the relationship between audit and non-audit fees. Journal of Applied Accounting Research, 10(2), 96-108. Adelopo, I., Jallow, K., & Scott, P. (2012). Multiple large ownership structure, audit committee activity and audit fees. Journal of Applied Accounting Research, 13(2), 100-121. Ahlawat, S. S., & Lowe, D. J. (2004). An examination of internal auditor objectivity: In-house versus outsourcing. Auditing: A Journal of Practice and Theory, 23(2), 147-158. Ahmad-Zaluki, N. A., & Wan-Hussin, W. N. (2010). Corporate governance and earnings forecasts accuracy. Asian Review of Accounting, 18(1), 50-67. American Institute of Public Accountants (2013). Q&A quality control: What every accountant needs to know. Retrieved on 16 June 16 2013 from http://www.cpai.com/show-article?id=264. Alexander, C., Bauguess, S., Bernile, G., Lee, Y., & Marietta-Westberg, J. (2013). Economic effects of SOX Section 404 compliance: A corporate insider perspective. Journal of Accounting and Economics, 56(2-3), 267-290. Alexander, D., & Hay, D. (2013). The effects of recurring and non-audit services on auditor independence. Managerial Auditing Journal, 28(5), 407-425. Ali, A., Haniffa, R., & Hudaib, R. (2006). Episodes in the Malaysian auditing saga. Managerial Auditing Journal, 21(7), 684-701. 299 Ali, A., Lee, T.H., Yusof N. Z. & Ojo, M. (2007). Development of auditing in Malaysia: Legal, political and historical influences. Munich Personal RePEc Archive Paper No. 28138. Allen, A., & Woodland, A. (2010). Education requirements, audit fees, and audit quality. Auditing: A Journal of Practice and Theory, 29(2), 1-25. Allgood, S., & Farrell, K. A. (2000). The effect of CEO tenure on the relation between firm performance and turnover. Journal of Financial Research, 23(3), 373-390. Altman, E. I. (1993). Corporate financial distress and bankruptcy. New York: John Wiley & Sons. Amran. N.A. (2010). Corporate governance mechanisms, sucession planning, firms performance: Evidence from Malaysian family firms and non-family controlled companies. PhD thesis, Universiti Utara Malaysia. Amran, N.A., & Che Ahmad, A. (2009). Family business, board dynamics and firm value: Evidence from Malaysia. Journal of Financial Reporting and Accounting, 7(1), 53-74. Anderson, D., Sweeney, D. & Williams, T. (1996). Statistics for business and economics (6th ed.). West Publishing Co. Anwar, Z. (2003). Board of directors: Performance beyond compliance. Opening address by Deputy Chief Executive, Securities Commission at the Conference on Corporate Governance – Adding Vision to Oversight, PWTC Kuala Lumpur, 1 August 2003. Retrieved on 31 January 2014 from http://www.sc.com.my/post_archive/board-of-directors-performance-beyondcompliance- opening-address-by-ybhg-datin-zarinah-anwar-deputy-chief300 executive-securities-commission-at-the-conference-on-corporate-governanceadding- visi/. Arel, B. (2010). The influence of litigation risk and internal audit source on reliance decision. Advances in Accounting, incorporating Advances in International Accounting, 26(2), 170-176. Arens, A. A., Elder, R. J., Beasley, M. S., Amran, N. A., Fadzil, F. H., Mohamad Yusof, N. Z., … & Shafie, R. (2014). Auditing and assurance services in Malaysia (3rd ed.). Kuala Lumpur: Pearson. Asare, S., Cohen, J., & Trompeter, G. (2005). The effect of non-audit service on client risk, acceptance and staffing decisions. Journal of Accounting and Public Policy, 24(6), 489-520. Asthana, S., Balsam, S., & Kim, S. (2009). The effect of Enron, Andersen, and Sarbanes-Oxley on the US market for audit services. Accounting Research Journal, 22(1), 4-26. Asthana, S. C. & Boone, J.P. (2012). Abnormal audit fee and audit quality. Auditing: A Journal of Practice and Theory, 31(3), 1-22. Audit Oversight Board (2010a). Register of auditors as at 30 September 2010. Kuala Lumpur: Securities Commision. Audit Oversight Board (2012b). Annual report 2011. Kuala Lumpur: Securities Commission. Autore, D. M., Billingsley, R. S., & Schneller, M. I. (2009). Information uncertainty and auditor reputation. Journal of Banking and Finance, 33(2), 183-192. Ayers, S., & Kaplan, S. E. (2003). Review partners' reactions to contact partner risk judgements of prospective clients. Auditing: A Journal of Practice and Theory, 22(1), 29-45. 301 Baber, W., Krishnan, J. & Zhang Y. (2014). Investor perceptions of the earnings quality consequences of hiring an affiliated auditor. Review of Accounting Studies, 19 (1), 69-102. Bai, J., & Ng, S. (2005). Tests for skewness, kurtosis, and normality for time series data. Journal of Business & Economic Statistics, 23(1), 49-60. Balsam, S., Krishnan, J., & Yang, J. (2003). Auditor industry specialization and earnings quality. Auditing: A Journal of Practice and Theory, 22(3), 71-97. Baltagi, B. H. (1995). Econometric analysis of panel data. Chichester: John Wiley & Sons. Barua, A., & Smith, A. (2013). SEC enforcement releases and audit fees. Managerial Auditing Journal, 28(2), 161-177. Basioudis, I. G. (2007). Auditor engagement risk and audit fee: The role of audit firm alumni. Journal of Business Finance and Accounting, 34(9-10), 1393-1422. Basioudis, I. G., & Francis, J. R. (2007). Big 4 audit fee premiums for national and office-level industry leadership in the United Kingdom. Auditing: A Journal of Practice and Theory, 26(2), 143-166. Bather, A. & Burnaby, P. (2006).The Public Company Accounting Oversight Board: National and international implications. Managerial Auditing Journal, 21(6), 657 – 669. Beasley, M. S. (1996). An empirical analysis of the relation between the boards of directors composition and financial statement fraud. The Accounting Review, 71(4), 443-465. Beasley, M. S., & Petroni, K. R. (2001). Board independence and audit-firm type. Auditing: A Journal of Practice and Theory, 20(1), 97-114. 302 Beattie, V., & Fearnley, S. (1995). The importance of audit firms characteristics and the drivers of auditor change in UK listed companies. Accounting and Business Research, 25(100), 227-239. Beattie, V., & Fearnley, S. (1999). Perceptions of auditor independence: UK evidence, Journal of International Accounting, Auditing and Taxation, 8(1), 67- 107. Beattie, V., Goodacre, A., & Fearnley, S. (2003). And then there were four: A study of UK audit market concentration. Journal of Financial Regulation and Compliance, 11(3), 250-265. Beaulieu, P. R. (2001). The effects of judgements of new clients' integrity upon risk judgements, audit evidence, and fees. Auditing: A Journal of Practice and Theory, 20(2), 85-99. Bedard, J. C., & Graham, L. (2002). The effects of risk orientation, underlying risk and client experience on risk factor identification and audit test planning. Auditing: A Journal of Practice and Theory, 21(2), 39-56. Bedard, J. C., & Johnstone, K. M. (2004). Earnings manipulation risk, corporate governance risk, and auditors' planning and pricing decisions. The Accounting Review, 79(2), 277-304. Bedard, J. C., & Johnstone, K. M. (2010). Audit partner tenure and audit planning and pricing. Auditing: A Journal of Practice and Theory, 29(2), 45-70. Bedard, J. C., Deis, D. R., Curtis, M. B., & Jenkins, J. G. (2008). Risk monitoring and control in audit firms: A research synthesis. Auditing: A Journal of Practice and Theory, 27(1), 187-218. Behn, B. K., Choi, J.-H., & Kang, T. (2008). Audit quality and properties of analyst earnings forecasts. The Accounting Review, 83(2), 327-349. 303 Behn, B. K., Lee, J. W., & Jin, L. H. (2009). An empirical analysis of audit fee price competition after the Korean 1999 Omnibus Cartel Repeal Act. Journal of International Accounting, Auditing and Taxation, 18, 132–140. Bell, T. J., Bedard, J., Johnstone, K., & Smith, E. (2002). A computerized decision aid for client acceptance and continuance risk assessment. Auditing: A Journal of Practice and Theory, 21(2), 97-113. Berle, A., & Means. G. (1932). The modern corporation and private property. United States: Transaction Publishers. Bewley, K., Chung, J., & McCracken, S. (2008). An examination of auditor choice using evidence from Andersen's demise. International Journal of Auditing, 12(2), 89–110. Bigus, J., & Zimmermann, R. (2008). Non-audit fees, market leaders and concentration in the German audit market: A descriptive analysis. International Journal of Auditing, 12(3), 159-179. Blay, A. D. (2005). Independence threats, and litigation risk, and the auditor's decision process. Contemporary Accounting Research, 22(4), 759-789. Bliss, M. A., Gul, F. A., & Majid, A. (2011). Do political connections affect the role of independent audit committees and CEO duality? Some evidence from Malaysian audit pricing. Journal of Contemporary Accounting and Economics, 7(2), 82-98. Bliss, M.A., Muniandy, B. & Majid, A. (2007). CEO duality, audit committee effectiveness and audit risk: A study of the Malaysian market. Managerial Auditing Journal, 22(7), 716-728. 304 Blokdijk, H., Drieenhuizen, F., Simunic, D. A., & Stein, M. T. (2003). Factors affecting auditors' assessments of planning materiality. Auditing: A Journal of Practice and Theory, 22(2), 297-307. Blokdijk, H., Drieenhuizen, F., Simunic, D. A., & Stein, M. T. (2006). An analysis of cross-sectional differences in big and non-big public accounting firms audit programs. Auditing: A Journal of Practice and Theory, 25(1), 27-48. Bockus, K., & Gigler, F. (1998). A theory of auditor resignation. Journal of Accounting Research, 36(2), 191-208. Bostwick, W. J., & Byington, J. R. (1997). Outsourcing of internal audit: Concerns and opportunities. Journal of Corporate Accounting and Finance, 8(4), 85-93. Brandon, D. M. (2010). External auditor evaluations of outsourced internal auditors. Auditing: A Journal of Practice and Theory, 29(2), 159-173. Brown, H. L., & Johnstone, K. M. (2009). Resolving disputed financial reporting issues: Effects of auditor negotiation experience and engagement risk on negotiation process and outcome. Auditing: A Journal of Practice and Theory, 28(2), 65-92. Brumfield, C. A., Elliott, R. K., & Jacobson, P. D. (1983). Business risk and the audit process. Journal of Accountancy, April, 60-68. Budescu, V., Peecher, M., & Solomon, I. (2012). Joint influence of the extent and nature of audit evidence, materiality thresholds, and misstatement type on achieved audit risk. Auditing: A Journal of Practice and Theory, 31(2), 19-41. Buijink, W. F., Maijoor, S. J., & Meuwissen, R. H. (1998). Competition in auditing: Evidence from entry, exit, and market share mobility in Germany versus the Netherlands. Contemporary Accounting Research, 15(3), 385-404. Bursa Malaysia (2009). Annual report 2008, Kuala Lumpur: Bursa Malaysia Berhad. 305 Bursa Malaysia (2010). Annual report 2009, Kuala Lumpur: Bursa Malaysia Berhad. Bursa Malaysia (2011). Annual report 2010, Kuala Lumpur: Bursa Malaysia Berhad. Bursa Malaysia (2013). Corporate governance guide (2nd ed.). Kuala Lumpur: Bursa Malaysia Berhad. Cahan, S. F., Emanuel, D., & Sun, J. (2009). Are the reputations of the large accounting firms really international? Evidence from the Andersen-Enron affair. Auditing: A Journal of Practice and Theory, 28(2), 199-226. Cahan, S. F., Jeter, D. C., & Naiker, V. (2011). Are all industry specialist auditors the same? Auditing: A Journal of Practice and Theory, 30(4), 191-222. Cameran, M. (2005). Audit fee and the large auditor premium in the Italian market. International Journal of Auditing, 9(2), 129-146. Campa, D. (2013). "Big 4 fee premium" and audit quality: Latest evidence from UK listed companies. Managerial Auditing Journal, 28(8), 680-707. Cao, Z. & Narayanamoorthy, G. (2014). Accounting and litigation risk: Evidence from directors' and officers' insurance pricing. Review of Accounting Studies, 19(1), 1-42. Caplan, D. H., & Kirschenheiter, M. (2000). Outsourcing and audit risk for internal audit services. Contemporary Accounting Research, 17(3), 387-427. Caramanis, C., & Lennox, C. (2008). Audit effort and earnings management. Journal of Accounting and Economics, 45(1), 116-138. Carcello, J., & Li, C. (2013). Costs and benefits of requiring an engagement partner signature: Recent experience in the United Kingdom. The Accounting Review, 88(5), 1511-1546. 306 Carson, E., Simnett, R., Soo, B. S., & Wright, A. M. (2012). Changes in audit market competition and the Big N premium. Auditing: A Journal of Practice and Theory, 31(3), 47-73. Carcello, J. V., & Neal, T. L. (2003). Audit committee independence and disclosure: Choice for financially distressed firms. Corporate Governance, 11(4), 289-299. Carcello, J. V., & Palmrose, Z. (1994). Auditor litigation and modified reporting on bankrupt clients. Journal of Accounting Research, 32(Supplement), 1-30. Carcello, J. V., Hermanson, D. R., & Raghunandan, K. (2005). Changes in internal auditing during the time of the major US accounting scandals. International Journal of Auditing, 9(2), 117-127. Carcello, J. V., Hermanson, D. R., Neal, T., & Riley, R. (2002). Board characteristics and audit fees. Contemporary Accounting Research, 19(3), 365-384. Carey, P., Subramaniam, N., & Ching, K. C. (2006). Internal audit outsourcing in Australia. Accounting and Finance, 46(1), 11-30. Carlin, T. M., Finch, N., & Laili, N. H. (2009). Investigating audit quality among Big 4 Malaysian firms. Asian Review of Accounting, 17(2), 96-114. Carson, E. (2009). Industry specialization by global audit firms network. The Accounting Review, 84(2), 355-382. Carson, E., Simnett, R., Soo, B., & Wright, A. M. (2007). The pricing of client risk by Big N and non Big N audit firms: 1996-2004. Retrieved on 1 April 2010 from http://ssrn.com/abstract=1023262. Carson, E., Simnett, R., Soo, B. S., & Wright, A. M. (2012). Changes in audit market competition and the Big N premium. Auditing: A Journal of Practice and Theory, 31(3), 47-73. 307 Cassell, C.A., Drake, M.S., & Rasmussen, S.J. (2011). Short interest as a signal of audit risk. Contemporary Accounting Research, 28(4), 1278-1297. Cassell, C. A., Giroux, G., Myers, L. A., & Omer, T. C. (2013). The emergence of second-tier auditors in the US: Evidence from investor perceptions of financial reporting credibility. Journal of Business Finance and Accounting, 40(3-4), 350-372. Cassell, C. A., Giroux, G., Myers, L.A., & Omer, T.C. (2012). The effect of corporate governance on auditor-client realignments. Auditing: A Journal of Practice and Theory, 31(2), 167-188. Casterella J. R., Jensen K. L., & Knechel W. R. (2010). Litigation risk and audit firm characteristics. Auditing: A Journal of Practice and Theory, 29(2), 71-82. Chan, P., Ezzamel, M., & Gwilliam, D. (1993). Determinants of audit fees for quoted UK companies. Journal of Business Finance and Accounting, 20(6), 765-786. Chaney, P. K. (2003). The impact on the market for audit services of aggressive competitive by auditors. Journal of Accounting and Public Policy, 22(6), 487- 516. Chaney, P. K., & Philipich, K. L. (2002). Shredded reputation: The cost of audit failure. Journal of Accounting Research, 40(4), 1221-1245. Chaney, P., Jeter, P., & Shivakumar, L. (2005). Self-selection of auditors and size nonlinearities in audit pricing. Retrieved on 18 April 2011 from http://www2.owen.vanderbilt.edu/fmrc/papers%20data/2005%20papers/Selfsele ctionofauditors_Jeter_Chaney.pdf Chaney, P. K., Jeter, D. C., & Shivakumar, L. (2004). Self selection of auditors and audit pricing in private firms. The Accounting Review, 79(1), 51-72. 308 Chang, C. J., & Hwang, N. R. (2003). The impact of retention incentives and client business risks on auditors' decisions involving aggressive reporting practices. Auditing: A Journal of Practice and Theory, 22(2), 207-218. Charles, S. L., Glover, S. M., & Sharp, N. Y. (2010). The association between financial reporting risk and audit fees before and the historic events surrounding SOX. Auditing: A Journal of Practice and Theory, 29(1), 15-39. Che Ahmad, A., Houghton, K. A. & Derashid, C. (1996). The pricing of audit services: Evidence from the KLSE listed companies. Jurnal Analisis, 4(1), 33- 45. Che Ahmad, A., Houghton, K. A., & Mohamad Yusof, N. Z. (2006a). The Malaysian market for audit services: Ethnicity, multinational companies and auditor choice. Managerial Auditing Journal, 21(7), 702-723. Che Ahmad, A., Shafie, R., & Mohamad Yusof, N. Z. (2006b). The provision of nonaudit services, audit fees and auditor independence. Asian Academy of Management Journal of Accounting and Finance, 2(1), 21-40. Chen, C., Martin, X., & Wang, X. (2013). Insider trading, litigation concerns, and auditor going concern opinions. The Accounting Review, 88(2), 365-393. Chen, C. J. P., Su, X., & Wu, X. 2007. Market competitiveness and Big 5 pricing: Evidence from China‟s binary market. International Journal of Auditing, 42, 1- 24. Chen, K. Y., & Zhou, J. Z. (2007). Audit committee, board characteristics, and auditor switch decisions by Andersen's clients. Contemporary Accounting Research, 24(4), 1085-1117. 309 Chen, K. Y., Elder, R. J., & Liu, J.-L. (2005). Auditor independence, audit quality and auditor-client negotiation outcomes: Some evidence from Taiwan. Journal of Contemporary Accounting and Economics, 1(2), 119-146. Chen, K. Y., Lin, K., & Zhou, J. (2005). Audit quality and earnings management for Taiwan IPO firms. Managerial Auditing Journal, 20(1), 86-104. Chen, Z., Ke, B., & Yang, Z. (2013). Minority shareholders' control rights and the quality of corporate decisions in weak investor protection countries: A natural experiment from China. The Accounting Review, 88(4), 1211-1238. Chi, W., Douthett E. B. Jr., & Lisic, L. L. (2012). Client importance and audit partner independence. Journal of Accounting and Public Policy, 31(3), 320-336. Chia, Y.M., Lapsley, I., Lee, H. (2007). Choice of auditors and earnings management during the Asian financial crisis. Managerial Auditing Journal, 22(2), 177 – 196. Chin, C., & Chi, H. (2009). Reducing restatements with increased industry expertise. Contemporary Accounting Research, 26(3), 729-765. Choi, J. & Lee, W. (2014). Association between Big 4 auditor choice and cost of equity capital for multiple-segment firms. Accounting and Finance, 54(1), 135- 163. Choi, J. H., Doogar, R. K., & Ganguly, A. R. (2004). The riskiness of large audit firm client portfolios and changes in audit liability regimes: Evidence from the U.S. audit market. Contemporary Accounting Research, 21(4), 747-785. Choi, J. H., Kim, C. (F) ., Kim, J., & Zang, Y. (2010). Audit office size, audit quality, and audit pricing. Auditing: A Journal of Practice and Theory, 29(1), 73-97. 310 Choi, J. H., Kim, J., Liu, X., & Simunic, D. A. (2008). Audit pricing, legal liability regimes, and Big 4 premiums: Theory and cross-country evidence. Contemporary Accounting Research, 25(1), 55-99. Chow, C. W., Ho, J., & Mo, L. L. (2006). Toward understanding Chinese auditors' structuring of audit approaches, client acceptance decisions, risk assessment, and stringency of imposed reporting standards. Journal of International Accounting Research, 5(1), 1-23. Chung, H. H. & Wynn, J.P. (2014). Corporate governance, directors' and officers' insurance premiums and audit fees. Managerial Auditing Journal, 29 (2), 173 – 195. Chung, J., Cullinan, C., Frank, M., Long, J., Mueller-Phillips, J., & O'Reilly, D. (2013). The auditor's approach to subsequent events: Insights from the academic literature. Auditing: A Journal of Practice and Theory, 32(Supplement 1), 167- 207. Church, B.K. & Shefchik, L.B. (2012). PCAOB inspections and large accounting firms. Accounting Horizons, 26(1), 43-63. Clatworthy, M. A., Makepeace, G. H., & Peel, M. J. (2009). Selection bias and the Big Four premium: New evidence using Heckman and matching models. Accounting and Business Research, 39(2), 139-166. Cohen, J., Krishnamoorthy, G., & Wright, A. (2004). The corporate governance mosaic and financial reporting quality. Journal of Accounting Literature, 23, 87-152. Cohen, J., Krishnamoorthy, G., & Wright, A. (2010). Corporate governance in the post Sarbanes-Oxley era: Auditors' experiences. Contemporary Accounting Research, 27(3), 751-786. 311 Cohen, J., Krishnamoorthy, G., & Wright, A. M. (2002). Corporate governance and the audit process. Contemporary Accounting Research, 19(4), 573-594. Cohen, J. R., & Hanno, D. M. (2000). Auditor's consideration of corporate governance and management control philosophy in preplaning and planning judgements. Auditing: A Journal of Practice and Theory, 19(2), 133-146. Cohen, J. R., Krishnamoorthy, G., & Wright, A. M. (2007). The impact of roles of the board on auditors' risk assessments and program planning decisions. Auditing: A Journal of Practice and Theory, 26(1), 91-112. Companies Commission of Malaysia (2009), Annual report 2008, Kuala Lumpur: Companies Commission of Malaysia. Companies Commission of Malaysia (2010), Annual report 2009, Kuala Lumpur: Companies Commission of Malaysia. Copley, P. A., & Douthett, E. B. Jr. (2002). The association between auditor choice, ownership retained, and earnings disclosure by firms making initial public offerings. Contemporary Accounting Research, 19(1), 49-75. Copley, P. A., Doucet, M. S., & Gaver, K. M. (1994). A simultaneous equations analysis of quality control review outcomes and engagement fees for audits of recipients of federal financial assistance. The Accounting Review, 69(1), 244- 256. Craswell, A., Stokes, J. S., & Laughton, J. (2002). Auditor independence and fee dependence. Journal of Accounting and Economics, 33(2), 253-275. Craswell, A. T., Francis, J. R., & Taylor, S. L. (1995). Auditor brand name reputations and industry specializations. Journal of Accounting and Economics, 20(3), 297-322. 312 Cushing, B. E., & Loebbecke, J. K. (1983). Analytical approcahes to audit risk: A survey and analysis. Auditing: A Journal of Practice and Theory, 3(1), 23-41. Datar, S.M., Feltham, G.A., & Hughes, J.S. (1991). The role of audits and audit quality in valuing new issues. Journal of Accounting and Economics,14(1), 3– 49. De George, E., Ferguson, C., & Spear, N. (2013). How much does IFRS cost? IFRS adoption and audit fees. The Accounting Review, 88(2), 429-462. De Martinis, M., Fukukawa, H., Mock, T. J. (2011). Exploring the role of country and client type on the auditor's client risk assessments and audit planning decisions. Managerial Auditing Journal, 26(7), 543 - 565. DeAngelo, L. E. (1981). Auditor size and audit quality. Journal of Accounting and Economics, 3(3), 183 - 199. Dedman, E., Kausar, A., & Lennox, C. (2013). The demand for audit in private firms: Recent large-sample evidence from the UK. European Accounting Review, DOI:10.1080/09638180.2013.776298. DeFond, M. (2004). Discussion of "The riskiness of large audit firm client portfolio and changes in audit liability regimes: Evidence from the U.S. audit market". Contemporary Accounting Research, 21(4), 787-794. DeFond, M. L. (1992). The association between changes in client firm agency costs and auditor switching. Auditing: A Journal of Practice and Theory, 11(1), 16- 31. DeFond, M. L., & Jiambalvo, J. (1994). Debt covenant violations and manipulations of accruals. Journal of Accounting and Economics, 17(1-2), 145-176. DeFond, M. L., & Lennox, C. S. (2011). The effect of SOX on small auditor exits and audit quality. Journal of Accounting and Economics, 52(1), 21-40. 313 DeFond, M. L., Francis, J. R., & Wong, T. J. (2000). Auditor industry specialization and market segmentation: Evidence from Hong Kong. Auditing: A Journal of Practice and Theory, 19(1), 49-66. DeFond, M. L., Raghunandan, K., & Subramanyam, K. R. (2002). Do nonaudit service fees impair auditor independence: Evidence from going concern audit opinions. Journal of Accounting Research, 40(4), 1247-1274. Deloitte. (2011). Deloitte. Retrieved on 4 April 2011 from http://www.deloitte.com/view/en_MY/my/myau/index.htm. Deng, M., Melumad, N., & Shibano, T. (2012). Auditors' liability, investments, and capital markets: A potential unintended consequences. Journal of Accounting Research, 50(5), 1179-1215. DeZoort, F. D., Houston, R. W., & Peters, M. F. (2001). The impact of internal auditor compensation and role on external auditors' planning judgements and decisions. Contemporary Accounting Research, 18(2), 257-281. Dikolli, S., Mayew, W. & Nanda D. (2014). CEO tenure and the performanceturnover relation. Review of Accounting Studies, 19 (1), 281-327. Doogar, R., Sougiannis, T., & Xie, H. (2003). The impairment of auditor credibility: Stock market evidence from the Enron-Andersen saga. Working paper, University of Illinois at Urbana-Champaign. Dopuch, N., & Simunic, D. (1982). Competition in auditing: An assessment. Fourth Symposium on Auditing Research. University of Illinois, 403-450. Dopuch, N., King, R. R., & Schatzberg, J. W. (1994). An experimental investigation of alternative damage-sharing liability regimes with an auditing perspective. Journal of Accounting Research, 32(Supplement), 103-130. 314 Dunstan, K., Kamarudin, A., & van Zijl, T. (2010). Auditor tenure, non-audit services and earnings conservatism. Paper presented at the Accounting & Finance Association of Australia and New Zealand Conference, Christchurch, New Zealand, 4-6 July 2010. Retrieved on 12 April 2011 from http://www.afaanz.org/openconf/2010/modules/request.php?module=oc_progra m&action=view.php&id=264. Dunn, K., Kohlbeck, M., & Mayhew, B. W. (2011). The impact of the Big 4 consolidation on audit market share equity. Auditing: A Journal of Practice and Theory, 30(1), 49-73. Duxbury, D., Moizer, P., & Wan-Mohamed, W. A. (2007). Effects of the PricewaterhouseCoopers merger on the UK audit services market. Managerial Auditing Journal, 22(2), 121-138. Dye, R. (1993). Auditing standards, legal liability, and auditor wealth. Journal of Political Economy, 101(5),887-994. Ebrahim, A. (2010). Audit fee premium and auditor change: The effect of Sarbanes- Oxley Act. Managerial Auditing Journal, 25(2), 102-121. Eichenseher, J. W. (1995). Additional factors in audit pricing: New evidence from Malaysia. Accounting Business Review, 2(1), 1-26. Elder, J., Zhang, J., Zhou, J., & Zhou, N. (2009). Internal control weaknessess and client risk management. Journal of Accounting, Auditing and Finance, 24(4), 543-579. Engel, E., Hayes, R. M., & Wang, X. (2010). Audit committee compensation and the demand for monitoring of the financial reporting practices. Journal of Accounting and Economics, 49(1-2), 136-154. 315 Eshleman, J. D. & Guo, P. (2014). Abnormal audit fees and audit quality: The importance of considering managerial incentives in tests of earnings management. Auditing: A Journal of Practice and Theory, 33(1), 117-138. Ettredge, M., Heintz, J., Li, C. & Scholz. S. (2011). Auditor Realignments Accompanying Implementation of SOX 404 ICFR Reporting Requirements. Accounting Horizons, 25(1), 17-40. Ettredge, M., Kwon, S.Y., & Lim, C.Y.(2009). Client, industry and country factors affecting choice of Big N industry expert auditors. Journal of Accounting, Auditing and Finance, 24(3), 433-467. Ettredge, M., Li, C., & Scholz, S. (2007). Audit fees and auditor dismissals in the Sarbanes Oxley Era. Accounting Horizons, 21(4), 371-386. Evans Jr, L., & Schwartz, J. (2014). The effect of concentration and regulation on audit fees: An application of panel data techniques. Journal of Empirical Finance, 27, 130–144. Ezat, A., & El-Masry, A. (2008). The impact of corporate governance on the timeliness of corporate internet reporting by Egyptian listed companies. Managerial Finance, 34(12), 848-867. Fadzil, F. H., Haron, H., & Jantan, M. (2005). Internal auditing practices and internal control system. Managerial Auditing Journal, 20(8), 844-866. Fafatas, S. A. (2006). Auditor risk management following audit failures. PhD thesis, University of Colorado at Boulder. Fama, E. F., & Jensen, M. C. (1983). Separation of ownership and control. Journal of Law and Economics, 26(2), 301-325. 316 Fan, J. P., & Wong, T. J. (2005). Do external auditors perform a corporate governance role in emerging markets? Evidence from East Asia. Journal of Accounting Research, 43(1), 35-72. Fan, Y., Woodbine, G., & Cheng, W. (2013). A study of Australian and Chinese accountants' attitudes towards independence issues and the impact on ethical judgements. Asian Review of Accounting, 21(3), 205-222. Fargher, N., Taylor, M. H., & Simon, D. T. (2001). The demand for auditor reputation across international markets for audit services. The International Journal of Accounting, 36(4), 407-421. Favere-Marchesi, M. (2000). Audit quality in ASEAN. The International Journal of Accounting, 35(1), 121-149. Feltham, G. A., Hughes, J. S., & Simunic, D. A. (1991). Empirical assessment of the impact of auditor quality on the valuation of new issues. Journal of Accounting and Economics, 14(4), 375-399. Ferguson, A., & Stokes, D. (2002). Brand name audit pricing, industry specialization and leadership premiums post Big 8 and Big 6 mergers. Contemporary Accounting Research, 19(1), 77-110. Ferguson, A., Francis, J. R., & Stokes, D. J. (2003). The effects of firm-wide and office-level industry expertise on audit pricing. The Accounting Review, 78(2), 429-448. Firth, M. (1997a). The provision of non-audit services by accounting firms to their audit clients. Contemporary Accounting Research, 14(2), 1-21. Firth, M. (1997b). The provision of non-audit services and the pricing of audit fees. Journal of Business Finance and Accounting, 24(3-4), 511-525. 317 Firth, M. (2002). Auditor provided consultancy services and their association with audit fees and audit opinions. Journal of Business Finance and Accounting, 29(5-6), 661-693. Fleischer, R. & Goettsche M. (2012). Size effects and audit pricing: Evidence from Germany. Journal of International Accounting, Auditing and Taxation, 21(2), 156-168. Folami, L. B., & Jacobs, F. (2002). A multidisciplinary approach to risk management for accounting firms. The Journal of Applied Business Research, 18(4), 69-88. Francis, J. R. (2004). What do we know about audit quality? British Accounting Review, 36(4), 345-368. Francis, J. R., & Krishnan, J. (1999). Accounting accruals and auditor reporting conservatism. Contemporary Accounting Research, 16(1), 35-166. Francis, J. R., & Wilson, E. R. (1988). Auditor changes: A joint test of theories relating to agency costs and auditor differentiation. The Accounting Review, 63(4), 663-683. Francis, J. R., & Yu, M. D. (2009). Big 4 office size and audit quality. The Accounting Review, 84(5), 1521-1552. Francis, J. R., Michas, P. N., & Seavey, S. E. (2013). Does audit market concentration harm the quality of audited earnings? Evidence from audit markets in 42 countries. Contemporary Accounting Research, 30(1), 325–355. Francis, J. R., Reichelt, K., & Wang, D. (2005). The pricing of national and cityspecific reputations for industry expertise in the U.S. audit market. The Accounting Review, 80(1), 113-136. 318 Francis, J. R., Richard, C., & Vanstraelen, A. (2009). Assessing France's joint audit requirement: Are two heads better than one? Auditing: A Journal of Practice and Theory, 28(2), 35-63. Francis, J. R., Stokes, D. J., & Anderson, D. (1999). City market as a unit of analysis in audit research and the re-examination of Big 6 market shares. Abacus, 35(2), 185-206. Frankel, R. M., Johnson, M. F., & Nelson, K. K. (2002). The relation between auditors' fees for nonaudit services and earnings managements. The Accounting Review, 77(Supplement), 71-105. Fuerman, R. D. (1998). The role of auditor culpability in naming auditor defendants in United States securities class actions. Critical Perspectives on Accounting, 10(3), 315-338. Fukukawa, H. (2011). Audit pricing and cost strategies of Japanese Big 3 firms. International Journal of Auditing, 15(2), 109–126. Geiger, M. A., Raghunandan, K., & Rama, D. V. (2006). Auditor decision-making in different litigation environments: The Private Securities Litigation Reform Act, audit reports and audit firm size. Journal of Accounting and Public Policy, 25(3), 332-353. Gendron, Y. (2001). The difficult client-acceptance decision in Canadian audit firms: A field investigation. Contemporary Accounting Research, 18(2), 283-310. Ghosh, A., & Pawlewicz, R. (2009). The impact of regulation on auditor fees: Evidence from the Sarbanes-Oxley Act. Auditing: A Journal of Practice and Theory, 28(2), 171-197. 319 Ghosh, A., Kallapur, S., & Moon, D. (2009). Audit and non-audit fees and capital market perceptions of auditor independence. Journal of Accounting and Public Policy, 28(5), 369-385. Gietzman, M., & Pettinicchio, A. (2013). External auditor reassessment of client business risk following the issuance of a comment letter by the SEC. European Accounting Review. DOI: 10.1080/09638180.2013.774703. Giroux, G., & Jones, R. (2007). Investigating the audit fee structure of local authorities in England and Wales. Accounting and Business Research, 37(1), 21-37. Glover, S. M., Prawitt, D. F., & Wood, D. A. (2008). Internal audit sourcing arrangement and the external auditor's reliance decision. Contemporary Accounting Research, 25(1), 193-213. Gramling, A. A. (1999). External auditors' reliance on work performed by internal auditor: The influence of fee pressure on this reliance decision. Auditing: A Journal of Practice and Theory, 18(Supplement), 117-135. Gramling, A. A., & Stone, D. N. (2001). Audit firm industry expertise: A review and synthesis of the archival literature. Journal of Accounting Literature, 20, 1-29. Grant Thornton Malaysia (2008). Credible accountants key to avoiding accounting fraud. Retrieved on 17 July 2013 from http://www.gt.com.my/press-room/presslisting/ press-release-2008/press_release_3jan2008.html. Green, D. L. (1999). Litigation risk for auditors and the risk society. Critical Perspectives on Accounting, 10(3), 339-353. Griffin, P. A., Lont, D. H., & Sun, Y. (2008). Corporate governance and audit fees: Evidence of countervailing relations. Journal of Contemporary Accounting and Economics, 4(1), 18-49. 320 Guedhami, O., Pittman, J., & Saffar, W. (2009). Auditor choice in privatized firms: Empirical evidence on the role of state and foreign owners. Journal of Accounting and Economics, 48(5) 151-171. Guedhami, O., Pittman, J. A. & Saffar W. (2014). Auditor choice in politically connected firms. Journal of Accounting Research, 52(1), 107-162. Gujarati, D. (2006). Essentials of econometrics (3rd ed.). Singapore: Irwin McGraw- Hill. Gul, F. A. (1999). Audit prices, product differentiation and economic equilibrium. Auditing: A Journal of Practice and Theory, 18(1), 90-100. Gul, F. A. (2006). Auditors' response to political connections and cronyism in Malaysia. Journal of Accounting Research, 44(5), 931-963. Gul, F. A., & Goodwin, J. (2010). Short-term debt maturity structures, credit ratings, and the pricing of audit services. The Accounting Review, 85(3), 877-909. Gul, F. A., Fung, S. Y., & Jaggi, B. (2009). Earnings quality: Some evidence on the role of auditor tenure and auditors' industry expertise. Journal of Accounting and Economics, 47(3), 265-287. Gunny, K., & Zhang, T. (2013). PCAOB inspection reports and audit delay. Journal of Accounting and Public Policy, 32(2), 136-160. Habib, A., Gong, R., & Hossain, M. (2013). Overvalued equities and audit fees: A research note. Managerial Auditing Journal, 28(8), 755-756. Hamilton, J., Li, Y., & Stoke, D. (2008). Is the audit services market competitive following Arthur Andersen's collapse? Accounting and Finance, 48(2), 233- 258. Han, C. (2012, August 6). Silver Bird's suit shocks accountants; may result in higher audit fee. The Star. Retrieved on 8 August 2012 from 321 http://www.thestar.com.my/story.aspx/?sec=business&file=%2f2012%2f8%2f6 %2fbusiness%2f11802870 Hariri, H., Abdul Rahman, N., & Che Ahmad, A. (2007). An empirical evidence of audit firm merger and audit pricing in Malaysia. Journal of Financial Reporting and Accounting, 5(1), 1-19. Haron, H., Chambers, A., Ramsi, R., & Ismail, I. (2004). The reliance of external auditors on internal auditors. Managerial Auditing Journal, 19(9), 1148-1159. Hay, D. (2013). Further evidence from meta-analysis of audit fee research. International Journal of Auditing, 17(2), 162-176. Hay, D., & Davis, D. (2004). The voluntary choice of an auditor of any level of quality. Auditing: A Journal of Practice and Theory, 23(2), 37-53. Hay, D., Knechel, W. R., & Ling, H. (2008). Evidence on the impact of internal control and corporate governance on audit fees. International Journal of Auditing, 12(1), 9-24. Hay, D. C., Baskerville, R. F., & Qiu, T. H. (2007). The association between partnership financial integration and risky audit client portfolios. Auditing: A Journal of Practice and Theory, 26(2), 57-68. Hay, D. C., Knechel, W. R., & Wong, N. (2006). Audit fees: A meta analysis of the effect of supply and demand attributes. Contemporary Accounting Research, 23(1), 141-191. Henderson, B. C., & Kaplan, S. E. (2000). An examination of audit report lag for banks: A panel data approach. Auditing: A Journal of Practice and Theory, 19(2), 159-173. Heninger, W. G. (2001). The association between auditor litigation and abnormal accruals. The Accounting Review, 76(1), 111-126. 322 Hill, C., Griffiths, W. & Judge, G. (1997), Undergraduate econometrics. United States of America: John Wiley & Sons, Inc. Hillison, W., & Kenneley, M. (1988). The economics of nonaudit services. Accounting Horizons, 2(3),32-40. Hogan, C. E., & Jeter, D. C. (1999). Industry specialization by auditors. Auditing: A Journal of Practice and Theory, 18(1), 1-17. Hogan, C. E., & Martin, R. D. (2009). Risk shifts in the market for audits: An examination of changes in risk for "second tier" audit firms. Auditing: A Journal of Practice and Theory, 28(2), 93-118. Hoitash, R., Hoitash, U., & Bedard, J. C. (2008). Internal control quality and audit pricing under the Sarbanes Oxley Act. Auditing: A Jornal of Practice and Theory, 27(1), 105-126. Hollingworth, C. (2007). Risk management in the post-SOX era: Do audit firms effectively retain clients? PhD thesis, University of Tennessee. Hope, O., Kang, T., Thomas, W., & Yoo, Y. K. (2008). Culture and auditor choice: A test of the secrecy hypothesis. Journal of Accounting and Public Policy, 27(5), 357-373. Hopwood, W., McKeown, J., & Mutchler, J. (1989). The sensitivity of financial distress prediction models to departures from normality. Contemporary Accounting Research, 5(1), 284-298. Houston, R. W., Peters, M. F., & Pratt, J. (2005). Nonlitigation risk and pricing audit services. Auditing: A Journal of Practice and Theory, 24(1), 37-53. Houston, R. W., Peters, M. F., & Pratt, J. H. (1999). The audit risk model, business risk and audit-planning decisions. The Accounting Review, 74(3), 281-298. 323 Huang, H., Liu, L., Raghunandan, K., & Rama, D. V. (2007). Auditor industry specialization, client bargaining power, and audit fees. Auditing: A Journal of Practice and Theory, 26(1), 147-158. Huang, H., Raghunandan, K., & Rama, D. (2009). Audit fee for initial audit engagements before and after SOX. Auditing: A Journal of Practice and Theory, 28(1), 171-190. Hudaib, M. & Haniffa, R. (2009). Exploring auditor independence: An interpretive approach. Accounting, Auditing and Accountability Journal, 22(2), 221-246. Hunt, A. K., & Lulseged, A. (2007). Client importance and non-big 5 auditors' reporting decisions. Journal of Accounting and Public Policy, 26(2), 212-248. Huss, H. F., & Jacobs, F. A. (1991). Risk containment: Exploring auditor decisions in the engagement process. Auditing: A Journal of Practice and Theory, 10(2), 16- 32. Huss, H. F., Jacobs, F. A., & Patterson, D. M. (1993). Managing risk in public accounting firms. Risk Management, 4(9), 51-60. Ireland, J. C., & Lennox, C. S. (2002). The large audit fee premium: A case of selectivity bias? Journal of Accounting, Auditing and Finance, 17(1), 73-91. Irving, J. H., Payne, J. L., & Walker, P. L. (2010). An empirical examination of the impact liability caps on the auditing market. Retrieved on 10 March 2001 from http://ssrn.com/abstract=1490056. Ishak, A., Mansor, N. & Sutan Maruhun, E. N. (2013). Audit market concentration and auditor‟s industry specialization. Procedia - Social and Behavioral Sciences, 91, 48 – 56. 324 Ismail, I., Haron, H., Ibrahim, D. N., & Mohd Isa, S. (2006). Service quality, client satisfaction, and loyalty towards audit firms. Perceptions of Malaysian public listed companies. Managerial Auditing Journal, 21(7), 738-756. Ismail, S., Joher Aliahmed, H., Md. Nassir, A., & Abdul Hamid, M. A. (2008). Why Malaysian second board companies switch auditors: Evidence of Bursa Malaysia. International Research Journal of Finance and Economics, 13, 123- 130. Iyer, V. M., Bamber, E. M., & Barfield, R. M. (1997). Identfication of accounting firm alumni with their former firm: Antecedents and outcomes. Accounting, Organization and Society, 22(3-4), 315-336. Jaffar, N. (2009). An empirical evidence on audit firm selection: A Malaysian case. European Journal of Economics, Finance and Administrative Sciences, 17, 7- 15. Jaffar, N., Mohd Ali, S., Selamat, Z., & Alias, N. (2005). The perception of the audit partners, audit committee and investment analyst on the audit quality attributes in Malaysia. Finance India, 19(2), 535-545. Janvrin, D. J., & Jeffrey, C. G. (2007). An investigation of auditor perceptions about subsequent events and factors that influence this audit task. Accounting Horizons, 21(3), 295-312. Jayaseelan, R. (2010, January 9). Implications of the Audit Oversight Board. The Star Bizweek, pp. 19. Jensen, M., & Roy, A. (2008). Staging exchange partner choices: When do status and reputation matters? Academy of Management Journal, 51(3), 495-516. 325 Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360. Jeppesen, K. K. (2007). Organizational risk in large audit firms. Managerial Auditing Journal, 22(6), 590-603. Johansen, T., & Pettersson, K. (2013). The impact of board interlocks on auditor choice and audit fees. Corporate Governance: An International Review, 21(3), 287-310. Joher, H., Ali, M., Shamsher, M., Annuar, M. N., & Ariff, M. (2000). Auditor switch decisions of Malaysian listed firms: Test of determinants and wealth effect. Pertanika Journal Social Science and Humanities, 8(2), 77-90. Johl, S., Jubb, C. A., & Houghton, K. A. (2007). Earnings management and the audit opinion: Evidence from Malaysia. Managerial Auditing Journal, 22(7), 688- 715. Johl, S., Subramaniam, N. & Mat Zain, M. (2012). Audit committee and CEO ethnicity and audit fees: Some Malaysian evidence. The International Journal of Accounting, 47(3), 302–332. Johnstone, K. M. (1997). Risk, strategy, and the client acceptance decision: A causal model. PhD thesis, Univeristy of Connecticut. Johnstone, K. M. (2000). Client acceptance decision: Simultaneous effects of client business risk, audit risk, auditor business risk, and risk adaptation. Auditing: A Journal of Practice and Theory, 19(1), 1-25. Johnstone, K. M., & Bedard, J. C. (2004). Audit firm portfolio management decisions. Journal of Accounting Research, 4(2), 659-690. 326 Johnstone, K. M., & Bedard, J. C. (2003). Risk management in client acceptance decisions. The Accounting Review, 78(4), 1003-1025. Jones, F. L., & Raghunandan, K. (1998). Client risk and recent changes in the market for audit services. Journal of Accounting and Public Policy, 17(2), 169-181. Kabir, M. H., Sharma, D., Islam, D., & Salat, A. (2011). Big 4 auditor affiliation and accruals quality in Bangladesh. Managerial Auditing Journal, 26(2), 161-181. Kallunki, J., Sahlstrom, P., & Zerni, M. (2007). Propensity to switch auditors and strictness of legal liability environment: The role of audit mispricing. International Journal of Auditing, 11(3), 165-185. Kang, B. (2010). Audit Oversight Board: Implications on small and medium-sized practitioners - an issue of capacity and quality. Accountants Today, 23(7), 38- 41. Kaplan, S., & Williams, D. (2013). Do going concern audit reports protect auditors from litigation? A simultaneous equations approach. The Accounting Review, 88(1), 199-232. Kealey, B. T., Lee, H. Y., & Stein, M. (2007). The association between audit-firm tenure and audit fees paid to successor auditors. Auditing: A Journal of Practice and Theory, 26(2), 95-116. Kend, M. (2008). Client industry audit expertise: Towards a better understanding. Pacific Accounting Review, 20(1), 49-62. Khalil, S., Magnan, M. L., & Cohen, J. R. (2008). Dual-class shares and audit pricing: Evidence from Canadian markets. Auditing: A Journal of Practice and Theory, 27(2), 199-216. Khan, A., & Mather, P. (2013). The value of executive director share ownership and discretionary accruals. Accounting Research Journal, 26(1), 35-55. 327 Khurana, I. K., & Raman, K. K. (2004). Litigation risk and the financial reporting credibility of Big 4 versus non-Big 4 audits: Evidence from Anglo-American countries. The Accounting Review, 79(2), 473-495. Kim, H., & Fukukawa, H. (2013). Japan's Big 3 firms' response to clients' business risk: Greater audit effort or higher audit fees? International Journal of Auditing, 17(2), 190-212. Kim, J, Liu, X., & Zheng, L. (2012). The impact of mandatory IFRS adoption on audit fees: Theory and evidence. The Accounting Review, 87(6), 2061-2094. Kim, Y. & Park, M.S. (2014). Real activities manipulation and auditors' clientretention decisions. The Accounting Review, 89(1), 367-401. Knechel, W. R. (2000). Behavioral research in auditing and its impact on audit education. Issues in Accounting Education, 15(4), 695-712. Knechel, W. R. (2007). The business risk audit: Origins, obstacles and opportunities. Accounting, Organizations and Society, 32(4-5), 383-408. Knechel, W. R., & Willekens, M. (2006). The role of risk management and governance in determining audit demand. Journal of Business Finance and Accounting, 33(9/10), 1344-1367. Knechel, W. R., Krishnan, G., Pevzner, M., Shefchik, L., & Velury, U. (2013). Audit quality: Insights from the academic literature. Auditing: A Journal of Practice and Theory, 32(Supplement 1), 385-421. Knechel, W. R., Naiker, V., & Pacheco, G. (2007). Does audior industry specialization matters? Evidence from market reaction to auditor switches. Auditing: A Journal of Practice and Theory, 26(1), 19-45. 328 Knechel, W. R., Niemi, L., & Sundgren, S. (2008). Determinants of auditor choice: Evidence from a small client market. International Journal of Auditing, 12(1), 65–88. Knechel, W. R., Niemi, L., & Zerni, M. (2013). Empirical evidence on the implicit determinants of compensation in Big 4 audit partnerships. Journal of Accounting Research, 51(2), 349-387. KPMG (2010). Overview. Retrieved on 8 July 2010 from http://www.kpmg.com.my/KPMG/Default.asp?MenuNo=52&GroupNo=3. Krishnan, J., & Krishnan, J. (1997). Litigation risk and auditor resignations. The Accounting Review, 72(4), 539-560. Krishnan, G., & Visvanathan, G. (2009). Do auditors price audit committee‟s expertise? The case of accounting versus nonaccountig financial experts. Journal of Accounting, Auditing and Finance, 24(11), 115-144. Krishnan, G., Sun, L., Wang, Q., & Yang, R. (2013). Client risk management: A pecking order analysis of auditor response to upward earnings management risk. Auditing: A Journal of Pratice and Theory, 32(2), 147-169. Krishnan, J., & Zhang, Y. (2005). Auditor litigation risk and corporate disclosure of quarterly review report. Auditing: A Journal of Practice and Theory, 24(Supplement),115-138. Krishnan, L. (2011). A legal scrutiny on the auditors' role to whistle-blow. Jurnal Undang-undang & Masyarakat, 15, 149-162. Koh, K., & Tong, Y. (2013). The effects of clients' controversial activities on audit pricing. Auditing: A Journal of Practice and Theory, 32(2), 67-96. La Porta, R., Lopez-de-Silanes, F., & Shleifer, A. (1999). Corporate ownership around the world. Journal of Finance, 54(2), 471-517. 329 La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. W. (1997). Legal determinants of external finance. Journal of Finance, 52(3), 1131-1150. La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. W. (1998). Law and finance. Journal of Political Economy, 106(6), 1113-1155. Lai, K., & Gul, F. A. (2008). Was audit quality of Laventhol and Howarth poor? Journal of Accounting and Public Policy, 27(3), 217-237.Lam, K. C., & Mensah, Y. M. (2006). Auditors' decision-making under going-concern uncertainties in low litigation-risk environments: Evidence from Hong Kong. Journal of Accounting and Public Policy, 25(6), 706-739. Landsman, W. R., Nelson, K. K., & Rountree, B. R. (2009). Auditor switches in the pre- and post-Enron eras: Risk or realignment. The Accounting Review, 84(2), 531-558. Larcker, D., & Richardson, S. A. (2004). Fees paid to audit firms, accrual choices, and corporate governance. Journal of Accounting Research, 42(3), 625-658. LaSalle, R. E. (2006). The civil justice system and going concern audit reports: Comments on "Auditors' decision-making under going concern uncertainties in low litigation risk environments: Evidence from Hong Kong". Journal of Accounting and Public Policy, 25(6), 740-745. Latham, C. K., & Linville, M. (1998). A review of the literature in audit litigation. Journal of Accounting Literature, 17, 175-213. Laux, V., & Newman, D. P. (2010). Auditor liability and client acceptance decisions. The Accounting Review, 85(1), 261-285. Laws of Malaysia, Act 125, Companies Act 1965 (Revised – 1973). Incorporating latest amendement – Act A1299/2007. 330 Lee, H., & Lee, H. (2013). Do Big 4 audit firms improve the value relevance of earnings and equity? Managerial Auditing Journal, 28(7), 628-646. Lee, H., Mande, V., & Son, M. (2009). Do lengthy auditor tenure and the provision of non-audit services by the external auditor reduce audit report lags? International Journal of Auditing, 13(2), 87-104. Lennox, C. S. (2011). Empirical research methods using Stata [PowerPoint slides]. Retrieved on 1 June 2013 from http://www.ntu.edu.sg/home/cslennox/teaching.htm. Lennox, C. S., & Park, C. W. (2007). Audit firm appointments, audit firm alumni, and audit committee independence. Contemporary Accounting Research, 24(1), 235-258. Lennox, C. S., Francis, J. R., & Wang Z. (2012). Selection models in accounting research. The Accounting Review, 87(2), 589-616. Leventis, S., & Dimitropoulos, P. E. (2010). Audit pricing, quality of earnings and board independence: The case of the Athens Stock Exchange. Advances in Accounting, incorporating Advances in International Accounting, 26(2), 325- 332. Leventis, S., Weetman, S. & Caramanis C. (2011). Agency costs and product market competition: The case of audit pricing in Greece. British Accounting Review, 43, 112-119. Liao, Y., Chi, W., & Chen, Y. (2013). Auditor economic dependence and accounting conservatism: Evidence from a low litigation risk setting. International Journal of Auditing, 17(2), 117-137. Lim, C., & Tan, H. (2008). Non-audit service fees and audit quality: The impact of auditor specialization. Journal of Accounting Research, 46(1), 199-246. 331 Limited Liability Partnership (LLP) Act 2012. Act 743. Lin, Z. J., & Liu, M. (2009). The impact of corporate governance on auditor choice: Evidence from China. Journal of International Accounting, Auditing and Taxation, 18(1), 44-59. Lin, Z. J., & Liu, M. (2013). The effects of managerial shareholding on audit fees: Evidence from Hong Kong. International Journal of Auditing, 17(3), 227-245. Listing Requirements of Bursa Malaysia Securities Berhad. Lowensohn, S., Johnson, L. E., Elder, R. J., & Davies, S. P. (2007). Auditor specialization, perceived audit quality, and audit fees in the local government audit market. Journal of Accounting and Public Policy, 26(6), 705-732. Lu,T. (2006). Does opinion shopping impair auditor independence and audit quality? Journal of Accounting Research, 44(3), 561-583. Lys, T., & Watts, R. L. (1994). Lawsuits against auditors. Journal of Accounting Research, 32(Supplement), 65-93. Malaysian Accounting Standards Board (2011a). Malaysian Financial Reporting Standard 127. Consolidated and separate financial statements. Kuala Lumpur: Malaysian Accounting Standards Board. Malaysian Accounting Standards Board (2011b). Malaysian Financial Reporting Standard 128. Investment in associates. Kuala Lumpur: Malaysian Accounting Standards Board. Malaysian Accounting Standards Board (2011c). Malaysian Financial Reporting Standard 131. Interests in joint ventures. Kuala Lumpur: Malaysian Accounting Standards Board. Malaysian Accounting Standard Board (2013). Glossary of terms. Kuala Lumpur: Malaysian Accounting Standards Board. 332 Malaysian Code on Corporate Governance (2012). Kuala Lumpur: Securities Commission. Malaysian Code on Corporate Governance (Revised 2007) (2007). Kuala Lumpur: Securities Commission. Malaysian Institute of Accountants (2008a). Annual report 2008. Kuala Lumpur: Malaysian Institute of Accountants. Malaysian Institute of Accountants (2008b). International Standard on Auditing 240. The auditor’s responsibilities relating to fraud in an audit of financial statements. Kuala Lumpur: Malaysian Institute of Accountants. Malaysian Institute of Accountants (2008c). International Standard on Auditing 315 (Revised). Identifying and assessing the risks of material misstatement through understanding the entity and its environment. Kuala Lumpur: Malaysian Institute of Accountants. Malaysian Institute of Accountants (2008d). International Standard on Auditing 330. The auditor’s responses to assessed risks. Kuala Lumpur: Malaysian Institute of Accountants. Malaysian Institute of Accountants (2008e). International Standard on Auditing ISA 560. Subsequent events. Kuala Lumpur: Malaysian Institute of Accountants. Malaysian Institute of Accountants (2009a). Annual report 2009. Kuala Lumpur: Malaysian Institute of Accountants. Malaysian Institute of Accountants (2009b). International Standard on Quality Control 1: Quality control for firms that perform audits and reviews of financial statements, and other assurance and related services engagements. Kuala Lumpur: Malaysian Institute of Accountants. 333 Malaysian Institute of Accountants (2009c). Practice review. Annual report 2004- 2008. Kuala Lumpur: Malaysian Institute of Accountants. Malaysian Institute of Accountants (2010, March 3). Get ISQC1 right first, MIA tells audit firms. MIA News. Retrieved on 23 January 2011 from http://www.mia.org.my/new/news_details.asp?tid=6&rid=5&id=1032#P8vmybI VYxDLGrc6.99. Malaysian Institute of Accountants (2010). Annual report 2010. Kuala Lumpur: Malaysian Institute of Accountants. Malaysian Institute of Accountants (2010a). Recommended Practice Guide 7 (Revised). A guide to charging for professional assurance services. Kuala Lumpur: Malaysian Institute of Accountants. Malaysian Institute of Accountants (2010b). By-laws (on professional ethics, conduct and practice) of the Malaysian Institute of Accountants. Amended as at 1 November 2013. Kuala Lumpur: Malaysian Institute of Accountants. Malek, M., & Che Ahmad, A. (2011). The relationships between director-auditor link and audit opinion. Asian Journal of Finance and Accounting, 3(1), 39-55. Manry, D. L., Mock, T., & Turner, J. L. (2007). The association of preaudit engagement risk with discretionary accruals. Journal of Accounting, Auditing and Finance, 22(4), 623-644. Markelevich, A., & Rosner, R. (2013). Auditor fees and fraud firms. Contemporary Accounting Research, 30(4), 1590-1625. Masters-Stout, B., Cotigan, M. L., & Lovata, L. M. (2008). Goodwill impairment and chief executive officer tenure. Critical Perspective on Accounting, 19(8), 1370- 1383. 334 Mat Zain, M., Subramaniam, N., & Stewart. (2006). Internal auditors' assessment of their contribution to financial statement audits: The relation with audit committee and internal audit function characteristics. International Journal of Auditing, 10(1), 1-18. Matthews, D., & Peel, M. J. (2003). Audit fee determinants and the large auditor premium in 1900. Accounting and Business Research, 33(2), 137-155. Mayhew, B., & Wilkins, M. (2003). Audit firm industry specialization as differentation strategy: Evidence from fees charged to firms going public. Auditing: A Journal of Practice and Theory, 22(2), 33-52. McMeeking, K. P. (2007). Competition in the UK accounting services market. Managerial Auditing Journal, 22(2), 197-217. McMeeking, K. P., Peasnell, K. V., & Pope, P. F. (2006). The determinants of the UK big firm premium. Accounting and Business Research, 36(3), 207-231. Md Yusof, M. 'A. (2010). Does audit committee constraint discretionary accruals in MESDAQ listed companies. International Journal of Business and Social Science, 1(3), 124-136. Md. Ali, A., Sahdan, M. H., Harun Rasit, M. H., & Lee, T. H. (2008). Audit specialisation in Malaysia. International Journal of Business and Management, 3(3), 91-99. Milbourn, T. (2003). CEO reputation and stock-based compensation. Journal of Financial Economics, 68(2), 233–262. Minutti-Meza, M. (2013). Does auditor industry specialization improve audit quality? Journal of Accounting Research, 51(4), 779-817. 335 Mitra, S., Hossain, M., & Deis, D. R. (2007). The empirical relationship between ownership characteristics and audit fees. Review Quantitative Finance and Accounting, 28(3), 257-285. Mock, T. J., & Wright, A. M. (1999). Are audit program plans risk-adjusted? Auditing: A Journal of Practice and Theory, 18(1), 55-74. Mohamad-Nor, M. N., Shafie, R., & Wan-Hussin, W. N. (2010). Corporate governance and audit report lag in Malaysia. Asian Academy of Management Journal of Accounting and Finance, 6(2), 57-84. Mohamad, M. H. S., Abdul Rashid, H. M., Shawtari, F. A. M. (2012). Corporate governance and earnings management in Malaysian government linked companies: The impact of GLCs‟ transformation policy, Asian Review of Accounting, 20(3), 241 – 258. Mohamad, S., & Joher, H. (2006). Auditor change during listings: Effect on IPO premiums. Journal of Business Case Studies, 2(4), 73-82. Mohamed, Z., Mat Zain, M., Subramaniam, N., & Wan Yusoff, W. F. (2012). Internal audit attributes and external audit's reliance on internal audit: Implications for audit fees. International Journal of Auditing, 16(3), 268-285. Mohd Ghazali, N. A. (2010). Ownership structure, corporate governance and corporate performance in Malaysia. International Journal of Commerce and Management, 20(2), 109- 119. Mohd Iskandar, T., & Aman, A. (2003). Audit market share and auditors' industry specialisation: Effects of different bases of measurement. Asian Academy of Management Journal, 8(1), 1-15. 336 Mohd Iskandar, T., & Wan Abdullah, W. Z. (2004). Audit committee and the selection of external auditors: The Malaysian evidence. Malaysian Accounting Review, 3(1), 123-136. Mohd Iskandar, T., Maelah, R., & Aman, A. (2000). Audit market concentration and auditor‟s industry specialization: An empirical evidence in Malaysia. Utara Management Review, 1(1), 93-112. Moizer, P. (1997). Auditor reputation: The international empirical evidence. International Journal of Auditing, 1(1), 61-74. Monteiroheng (2007-2008). International affiliates. Retrieved on 8 July 2010 from http://www.monteiroheng.com.my/InternationalAffiliates.aspx. Morris, R., Pham, T., & Gray, S. (2011). The value relevance of transparency and corporate governance in Malaysia before and after the Asian financial crisis. Abacus, 47(2), 205-233. Muhamad Sori, Z. (2009). Audit market competition: Causes and consequences. ICFAI University Journal of Audit Practice, 6(1), 36-41. Muhamad Sori, Z., & Mohamad, S. (2008). Governance structure and external audit price: Evidence from an emerging economy. International Journal of Economics and Management, 2(2), 259 – 279. Muhamad Sori, Z., Abdul Hamid M.A., Md Nassir, A., & Mohamad Z.A. (2001), Forecasting corporate failure in Malaysian industrial sector firms. Asian Academy of Management Journal, 6(1), 15-30. Muhamad Sori, Z., Mohamad, S., & Karbhari, Y. (2006), Auditor reputation and auditor independence: Evidence from an emerging market. Retrieved on 1 December 2011 from http://ssrn.com/abstract=895484. 337 Muniandy, B. (2007). CEO duality, audit committee effectiveness and audit risks: A study of the Malaysian market. Managerial Auditing Journal, 22(7), 716-728. Munro, L., & Stewart, J. (2010). External auditors' reliance on internal audit: The impact of sourcing arrangements and consulting services. Accounting and Finance, 50, 371-387. Mustapha, M., & Che Ahmad, A. (2011). Agency theory and managerial ownership: Evidence from Malaysia. Managerial Auditing Journal, 26(5), 419-436. Myers, L., Schmidt, J., & Wilkins, M. (2013). An investigation of recent changes in going concern reporting decisions among Big N and non-Big

Engagement risk, auditor choice and audit fee in the Malaysian audit market

Similar Items