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Family Presence in The Firm’s Capital and External Auditor Choice: Evidence from French Listed Firms

Author

Listed:
  • Salma Damak Ayadi

    (IHEC Carthage, University of Carthage, LIGUE, University of Manouba, Tunisia)

  • Rahma Ben Salem

    (ISIG, University of Kairouan, LIGUE, University of Manouba, Tunisia)

  • Asma Abdouli

    (University of Carthage, Tunisia)

Abstract

Research question: The study investigates the impact of family presence in the firm’s capital on the demand for audit quality. Motivation: The place occupied by family businesses in the world economy and the role of external auditors as a guarantor of the quality of financial information. Idea: Auditor choice is one of the most important decisions a firm has to make. It is an important external governance mechanism. This study shows the effect of family presence in the firm’s capital on auditor choice. Data: In the study, a data set of 257 French listed firms during 2016 has been analysed. Tools: The study proposes a quantitative model based upon a binary logistic regression. Findings: Our results support that the family ownership structure is significantly and negatively related to the choice of higher-auditor quality. These results have allowed us to conclude that French family listed firms are less likely to appoint higher quality auditors. In summary, we find that family presence negatively affects the demand for audit quality.

Suggested Citation

  • Salma Damak Ayadi & Rahma Ben Salem & Asma Abdouli, 2020. "Family Presence in The Firm’s Capital and External Auditor Choice: Evidence from French Listed Firms," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 19(2), pages 195-214, June.
    • Handle: RePEc:ami:journl:v:19:y:2020:i:2:p:195-214
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    Cited by:

    1. Mohamed M. El-Dyasty & Ahmed A. Elamer, 2021. "The effect of ownership structure and board characteristics on auditor choice: evidence from Egypt," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 18(4), pages 362-377, December.

    More about this item

    Keywords

    family presence; audit quality; Top 10 French audit firms; family firms;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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