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Managerial ownership, audit committees and non-audit services

Author

Listed:
  • Yuan George Shan

    (Department of Accounting and Finance, UWA Business School, The University of Western Australia, Crawley, WA, Australia)

  • Indrit Troshani
  • Janice Loftus

    (Adelaide Business School, The University of Adelaide, Adelaide, SA, Australia)

Abstract

We extend prior research on corporate governance and non-audit services (NAS) by distinguishing between the management entrenchment region of management ownership and regions in which the interests of management and shareholders converge. Management entrenchment and convergence-of-interests regions were estimated for our sample of 5198 Australian firm-years. NAS is negatively (positively) associated with management ownership in the convergence-of-interests (entrenchment) regions. However, using a sub-sample based on firms that have audit committees, we find the association between NAS and management ownership is confined to the entrenchment region, while audit committee strength is negatively associated with NAS fees across all management ownership regions. JEL Classification: M42, M48

Suggested Citation

  • Yuan George Shan & Indrit Troshani & Janice Loftus, 2021. "Managerial ownership, audit committees and non-audit services," Australian Journal of Management, Australian School of Business, vol. 46(3), pages 409-436, August.
    • Handle: RePEc:sae:ausman:v:46:y:2021:i:3:p:409-436
    DOI: 10.1177/0312896220945763
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    More about this item

    Keywords

    Agency theory; audit committees; corporate governance; managerial ownership; non-audit service fees;
    All these keywords.

    JEL classification:

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

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