Corporate Governance and Audit Fees: Evidence from a Developing Country
In this paper, we investigate the effect of board and audit committee quality on the audit fees in the context of developing country of Pakistan. We us five years data of KSE-100 index companies listed on Pakistan Stock Exchange. To draw the inference, we use the Partial Least Square based Struct...
| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Johar Education Society
2018-04-01
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| Series: | Pakistan Journal of Commerce and Social Sciences |
| Subjects: | |
| Online Access: | http://jespk.net/publications/415.pdf |
| Summary: | In this paper, we investigate the effect of board and audit committee quality on the audit
fees in the context of developing country of Pakistan. We us five years data of KSE-100
index companies listed on Pakistan Stock Exchange. To draw the inference, we use the
Partial Least Square based Structural Equation Modeling. We find that effective board
quality (measured through board size, board independence, CEO duality, chairperson
independence, board equity holding, and board diligence) is positively associated with
external auditor fees. This finding suggests that, high quality board demands higher
quality audit to have further assurance on the quality of financial reporting. While, we
find audit committee effectiveness (measured through audit committee size, audit
committee independence, and audit committee diligence) reduces the external audit fee,
which supports our notion that, the high quality audit committee will ensure reliable
financial reporting which reduces external auditor’s efforts that result in lower audit fees. |
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| ISSN: | 1997-8553 2309-8619 |