Institutional Monitoring, Political Connections and Audit Fees: Evidence from Malaysian Firms

Chwee Ming Tee; Ferdinand A. Gul; Yee-Boon Foo; Chee Ghee Teh

doi:10.1111/ijau.12086

Back

Institutional Monitoring, Political Connections and Audit Fees: Evidence from Malaysian Firms

Journal article

Peer reviewed

Institutional Monitoring, Political Connections and Audit Fees: Evidence from Malaysian Firms

Chwee Ming Tee, Ferdinand A. Gul, Yee-Boon Foo and Chee Ghee Teh

International Journal of Auditing, Vol.21(2), pp.164-176

2017

DOI: https://doi.org/10.1111/ijau.12086

Files and links (1)

url

https://doi.org/10.1111/ijau.12086View

Published Version

Abstract

Institutional ownership

institutional domiciles

political connections

audit fees

This study employs data on Malaysian firms from 2003 to 2011 to show that ownership by institutional investors is positively associated with audit fees, and this positive association is stronger for firms that are politically connected to the Malaysian government. The results of this study are aligned with the theories that institutional investors can play an effective monitoring role by demanding higher audit quality, particularly if their investee firms are politically connected. Additional tests reveal that the main results are largely driven by foreign institutional investors, while it is insignificant for local institutional investors. Therefore, our evidence suggests that institutional investors, particularly foreign institutions, demand increased audit effort (proxied by audit fees) as a method to monitor politically connected firms.

Details

Title: Institutional Monitoring, Political Connections and Audit Fees: Evidence from Malaysian Firms
Authors: Chwee Ming Tee (Corresponding Author) - Monash University Malaysia
Ferdinand A. Gul (Author) - Deakin University
Yee-Boon Foo (Author) - Monash University Malaysia
Chee Ghee Teh (Author) - Monash University Malaysia
Publication details: International Journal of Auditing, Vol.21(2), pp.164-176
Publisher: Wiley-Blackwell Publishing Ltd.
DOI: 10.1111/ijau.12086
ISSN: 1099-1123
Organisation Unit: School of Business and Creative Industries; University of the Sunshine Coast, Queensland
Language: English
Record Identifier: 99679190802621
Output Type: Journal article

Metrics

24 Record Views

52 Times Cited - Web of Science

See more details

InCites Highlights

These are selected metrics from InCites Benchmarking & Analytics tool, related to this output

Collaboration types: Domestic collaboration; International collaboration
Web Of Science research areas: Business, Finance

UN Sustainable Development Goals (SDGs)

This output has contributed to the advancement of the following goals:

Source: InCites