IDEAS home Printed from https://ideas.repec.org/a/pdc/jrnbeh/v14y2018i3p587-614.html
   My bibliography  Save this article

Board diversity, audit committee characteristics and audit quality: The moderating role of control-ownership wedge

Author

Listed:
  • Aree Saeed Mustafa
  • Ayoib Che-Ahmad
  • Sitraselvi Chandren

Abstract

This study illustrates how control-ownership wedge impacts the monitoring role of the corporate board through the quality of audit services in Turkey. Turkey has made essential amendments in the field of external audit in order to enhance the quality of the financial report and integrate its own capital market with that of the EU. It would be of interest to examine the influence of these changes on clients' demand for high quality audit. The agency theory is integrated with the resource dependence theory to show that boards possess distinct incentives and ability to demand high quality audit to monitor management activities. Logistic regression and feasible generalized least squares (FGLS) were used for regression estimations. The results indicate that board demographics, cognitive and structural diversity of board of directors, audit committee characteristics and audit quality are complementary and control-ownership wedge weakens the relationship between them which is an unfavorable outcome for minority shareholders. Thus, this study proposes that regulators should increase law enforcement to enhance good corporate governance in Turkey to accommodate the unique features of wedge firms and provide a protected environment for minority shareholders.

Suggested Citation

  • Aree Saeed Mustafa & Ayoib Che-Ahmad & Sitraselvi Chandren, 2018. "Board diversity, audit committee characteristics and audit quality: The moderating role of control-ownership wedge," Business and Economic Horizons (BEH), Prague Development Center, vol. 14(3), pages 587-614, June.
    • Handle: RePEc:pdc:jrnbeh:v:14:y:2018:i:3:p:587-614
    DOI: 10.15208/beh.2018.42
    as

    Download full text from publisher

    File URL: https://academicpublishingplatforms.com/downloads/pdfs/beh/volume32/201806160643_42_BEH_2018_Vol14_Issue3_Aree-Saeed-Mustafa_et_al_Board_diversity_audit_quality_pp.587-614.pdf
    Download Restriction: no
    File URL: https://academicpublishingplatforms.com/article.php?journal=BEH&number=32&article=2541
    Download Restriction: no
    File URL: https://libkey.io/10.15208/beh.2018.42?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Elliroma Gardiner, 2024. "What’s age got to do with it? The effect of board member age diversity: a systematic review," Management Review Quarterly, Springer, vol. 74(1), pages 65-92, February.
    2. Aree Saeed MUSTAFA & Luqman Muhammed SAEED & Nishtiman Hashim MOHAMMED, 2018. "Auditor Selection in Borsa Istanbul," The Audit Financiar journal, Chamber of Financial Auditors of Romania, vol. 16(152), pages 599-599.
    3. Isabel-María García-Sánchez & Nicola Raimo & Víctor Amor-Esteban & Filippo Vitolla, 2023. "Board committees and non-financial information assurance services," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 27(1), pages 1-42, March.
    4. Michael Forzeh Fossung & Samuel Tanjeh Mukah & Kueda Wamba Berthelo & Motika Eubert Nsai, 2022. "The Demand for External Audit Quality: The Contribution of Agency Theory in the Context of Cameroon," Accounting and Finance Research, Sciedu Press, vol. 11(1), pages 1-13, February.
    5. Ines Ben Jazia & Maali Kachouri, 2024. "Board Size as a Mediator in the Relationship Between Corporate Social Responsibility and Audit Quality: Insights from Europe," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(2), pages 91-112.

    More about this item

    Keywords

    Audit quality; board diversity; audit committee; control-ownership wedge; Turkey;
    All these keywords.

    JEL classification:

    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pdc:jrnbeh:v:14:y:2018:i:3:p:587-614. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Jaroslav Holecek (email available below). General contact details of provider: https://edirc.repec.org/data/pradecz.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.