Auditor choice in privatized firms: Empirical evidence on the role of state and foreign owners

Omrane Guedhami, Jeffrey A. Pittman, Walid Saffar

Research output: Journal article publicationJournal articleAcademic researchpeer-review

120 Citations (Scopus)


We rely on a unique dataset of 176 privatizations from 32 countries to extend recent research on the link between the political economy and accounting transparency by examining the importance of shareholders' proportionate holdings to auditor choice. Consistent with our predictions on shareholders' diverging interests in high-quality financial reporting that manifests in auditor choice, we report strong, robust evidence that privatized firms worldwide become less (more) likely to appoint a Big Four auditor with the extent of state (foreign) ownership. Moreover, we find that these relations between shareholders' equity stakes and auditor choice strengthen when country-level governance institutions are weaker.
Original languageEnglish
Pages (from-to)151-171
Number of pages21
JournalJournal of Accounting and Economics
Issue number2-3
Publication statusPublished - 1 Dec 2009
Externally publishedYes


  • Auditor choice
  • Corporate governance
  • Disclosure
  • Privatization

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics

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