Do political connections affect the role of independent audit committees and CEO Duality? Some evidence from Malaysian audit pricing

Mark Anthony Gerard Bliss, Ferdinand A. Gul, Abdul Majid

Research output: Journal article publicationJournal articleAcademic researchpeer-review

40 Citations (Scopus)

Abstract

This study examines whether political connection to firms affects the association between audit committee independence and demand for higher quality audits. In line with Carcello et al. (2002), our findings show that there is a positive association between audit committee independence and audit fees thus supporting the hypothesis that more independent audit committees demand higher audit quality. However, we find that this relationship is weaker for politically connected (PCON) firms suggesting that the independence of audit committees in Malaysian PCON firms may be compromised. Additionally, we provide evidence that PCON firms that have CEO duality are perceived by audit firms as being of higher risk than CEO duality firms without political connection.
Original languageEnglish
Pages (from-to)82-98
Number of pages17
JournalJournal of Contemporary Accounting and Economics
Volume7
Issue number2
DOIs
Publication statusPublished - 1 Dec 2011

Keywords

  • Audit committees
  • Audit fee pricing
  • CEO duality
  • Political connection

ASJC Scopus subject areas

  • Accounting

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