BOARD CHARACTERISTICS AND INDUSTRY SPECIALIST AUDITOR : THE MODERATING ROLE OF CONCENTRATED OWNERSHIP
This study illustrates the impact of concentrated ownership on the monitoring role of board of directors in term of high quality audit proxy by industry specialist auditor. The integration of agency theory and resource dependency theory reflects that board has different incentives and abilities to monitor management. The analyses of Turkish listed firms indicates that board characteristic complement high quality audit when ownership concentration at low levels. When ownership concentration is at high level, this is not the case- proposing that there is substitution influence between concentrated ownership and board characteristics in term of the demand for high quality audit.
2. Adams, R. B., & Ferreira, D. (2009). Women in the boardroom and their impact on governance and performance. Journal of Financial Economics, 94(2), 291–309.
3. Adams, R. B., Gray, S., & Nowland, J. (2010). Is there a business case for female directors? Evidence from the market reaction to all new director appointments. In 23rd Australasian Finance and Banking Conference.
4. Aguilera, R. V, Filatotchev, I., Gospel, H., & Jackson, G. (2008). Contingencies, complementarities, and costs in corporate governance models. Organization Science, 19(3), 475–492.
5. Aguilera, R. V, & Jackson, G. (2003). The cross-national diversity of corporate governance : Dimensions and determinants. Academy of Management Review, 28(3), 447–465.
6. Ararat, M., Aksu, M., & Tansel Cetin, A. (2015). How board diversity affects firm performance in emerging markets : Evidence on channels in controlled firms. Corporate Governance (Oxford), 23(2), 83–103. http ://doi.org/10.1111/corg.12103
7. Ararat, M., Süel, E., Aytekin, B., & Alkan, S. (2014). Women on board Turkey : 2014 (2nd Annual Report : Independent Women Directors Project).
8. Bantel, K. A., & Jackson, S. E. (1989). Top management and innovations in banking : Does the composition of the top team make a difference? Strategic Management Journal, 10(S1), 107–124.
9. Beiner, S., Drobetz, W., Schmid, F., & Zimmermann, H. (2004). Is board size an independent corporate governance mechanism? Kyklos, 57(3), 327–356.
10. Bohinc, R., & Bainbridge, S. M. (2001). Corporate governance in post-privatized Slovenia. The American Journal of Comparative Law, 49(1), 49–77.
11. Carcello, J. V, Hermanson, D. R., Neal, T. L., & Riley, R. A. (2002). Board Characteristics and Audit Fees*. Contemporary Accounting Research, 19(3), 365–384.
12. Chancharat, N., Krishnamurti, C., & Tian, G. (2012). Board structure and survival of new economy IPO firms. Corporate Governance : An International Review, 20(2), 144–163.
13. Cheng, L. T. W., & Leung, T. Y. (2012a). The Effects of Management Demography on Auditor Choice and Earnings Quality : Evidence from China. Review of Pacific Basin Financial Markets and Policies, 15(02), 1150009. http ://doi.org/10.1142/S0219091511500093
14. Cheng, L. T. W., & Leung, T. Y. (2012b). The Effects of Management Demography on Auditor Choice and Earnings Quality : Evidence from China. Review of Pacific Basin Financial Markets and Policies, 15(02), 1150009. http ://doi.org/10.1142/S0219091511500093
15. Claessens, S., Djankov, S., Fan, J. P. H., & Lang, L. H. P. (2002). Disentangling the incentive and entrenchment effects of large shareholdings. The Journal of Finance, 57(6), 2741–2771.
16. Courtney, N. P., & Jubb, C. A. (2005). . Attachments between directors and auditors : do they affect engagement tenure? ANU E Press Canberra.
17. Craswell, A. T., Francis, J. R., & Taylor, S. L. (1995). Auditor brand name reputations and industry specializations. Journal of Accounting and Economics, 20(3), 297–322.
18. Dalton, D. R., Daily, C. M., Johnson, J. L., & Ellstrand, A. E. (1999). Number of directors and financial performance : A meta-analysis. Academy of Management Journal, 42(6), 674–686.
19. Dalton, D. R., Hitt, M. A., Certo, S. T., & Dalton, C. M. (2007). 1 The Fundamental Agency Problem and Its Mitigation : Independence, Equity, and the Market for Corporate Control. The Academy of Management Annals, 1(1), 1–64.
20. Datta, D. K., & Rajagopalan, N. (1998). Industry structure and CEO characteristics : An empirical study of succession events. Strategic Management Journal, 833–852.
21. Davies, P. L. (2000). Board structure in the UK and Germany : convergence or continuing divergence?
22. Davison, A. G., Stening, B. W., & Wai, W. T. (1984). Auditor concentration and the impact of interlocking directorates. Journal of Accounting Research, 313–317.
23. Desender, K., Aguilera, R. V, Crespi-Cladera, R., & Garcia-Cestona, M. A. (2009). Board characteristics and audit fees : Why ownership structure matters. University of Illinois at Urbana-Champaign, College of Business WP, 9–107.
24. Deutsch, Y. (2005). The impact of board composition on firms’ critical decisions : A meta-analytic review. Journal of Management, 31(3), 424–444.
25. Fama, E. F., & Jensen, M. C. (1983). Separation of ownership and control. Journal of Law and Economics, 301–325.
26. Fan, J. P. H., & Wong, T. J. (2002). Corporate ownership structure and the informativeness of accounting earnings in East Asia. Journal of Accounting and Economics, 33(3), 401–425.
27. Filatotchev, I., Lien, Y.-C., & Piesse, J. (2005). Corporate governance and performance in publicly listed, family-controlled firms : Evidence from Taiwan. Asia Pacific Journal of Management, 22(3), 257–283.
28. Finkelstein, S., & Hambrick, D. C. (1996a). Strategic leadership : Top executives and their effects on organizations. South-Western Pub.
29. Finkelstein, S., & Hambrick, D. C. (1996b). Strategic Leadership : Top Executives And Their Effects On Organizations (Hornbooks) Author : Sydney Finkelstein, Donald C. (Vol. 22). South-Western Pub.
30. Gacar, A. (2016). Relationship Between Audit Quality and Corporate Governance : An Empirical Research in Borsa Istanbul. IOSR Journal of Business and Management (IOSR-JBM), 18(11), 84–88. http ://doi.org/10.9790/487X-1811068488
31. González, J. S., & García-Meca, E. (2014). Does corporate governance influence earnings management in Latin American markets? Journal of Business Ethics, 121(3), 419–440.
32. Greene. (2003). Econometric Analysis of Count Data. Journal of the American Statistical Association (Vol. 97). http ://doi.org/10.1198/jasa.2002.s458
33. Guest, P. M. (2009). The impact of board size on firm performance : evidence from the UK. The European Journal of Finance, 15(4), 385–404.
34. Hair, J. F. J., Black, W. C., Babin, B. J., & Anderson, R. E. (2010). Multivariate Data Analysis Seventh Edition Prentice Hall.
35. Haniffa, R., & Hudaib, M. (2006). Corporate Governance Structure and Performance of Malaysian Listed Companies. Journal of Business Finance & Accounting, 33(7-8), 1034–1062. http ://doi.org/10.1111/j.1468-5957.2006.00594.x
36. Harris, I. C., & Shimizu, K. (2004). Too busy to serve? An examination of the influence of overboarded directors. Journal of Management Studies, 41(5), 775–798.
37. Hashim, H. A., & Rahman, M. S. A. (2011). Multiple board appointments : are directors effective? International Journal of Business and Social Science, 2(17).
38. Hay, D. C., Knechel, W. R., & Wong, N. (2006). Audit fees : A Meta‐analysis of the effect of supply and demand attributes. Contemporary Accounting Research, 23(1), 141–191.
39. Hillman, A., Cannella, A. J., & Paetzold, R. (2000). The resource dependence role of corporate directors : strategic adaptation of board composition in response to environmental change. Journal of Management …, 37(March), 235–256. http ://doi.org/DOI : 10.1111/1467-6486.00179
40. Jensen, M. C. (1993). The modern industrial revolution, exit, and the failure of internal control systems. The Journal of Finance, 48(3), 831–880.
41. Jensen, M. C., & Meckling, W. H. (1979). Theory of the firm : Managerial behavior, agency costs, and ownership structure. Springer.
42. Kaplan, S. N., & Minton, B. A. (1994). Appointments of outsiders to Japanese boards : Determinants and implications for managers. Journal of Financial Economics, 36(2), 225–258.
43. Karaibrahimoglu, Y. Z. (2013). Is Corporate Governance A Determinant of Auditor Choice. Ege Academic Review, 13(2), 273–284.
44. Kosnik, R. D. (1987). Greenmail : A study of board performance in corporate governance. Administrative Science Quarterly, 163–185.
45. La Porta, R., Lopez-de-Silanes, F., Shleifer, A., & Vishny, R. (1999). The quality of government. Journal of Law, Economics, and Organization, 15(1), 222–279.
46. Lee, H. Y., Mande, V., & Ortman, R. (2004). The effect of audit committee and board of director independence on auditor resignation. Auditing : A Journal of Practice & Theory, 23(2), 131–146.
47. Maury, B. (2006). Corporate performance, corporate governance and top executive turnover in Finland. European Financial Management, 12(2), 221–248.
48. Mustafa, A., Che-Ahmad, A., Chandren, & Sitraselvi. (2017). Board diversity and audit quality : Evidence from Turkey. Journal of Advanced Research in Business and Management Studies, 6(1), 50–60.
49. Nugroho, B. Y., & Eko, P. U. (2012). Board characteristics and earning management. BISNIS & BIROKRASI : Jurnal Ilmu Administrasi Dan Organisasi, 18(1).
50. Ou-Yan, H., & Shuang-shii, C. (2007). CEO turnover, board chairman turnover, the key determinants : Empirical study on Taiwan listed company. The Business Review, 7(2), 129–135.
51. Park, Y. W., & Shin, H.-H. (2004). Board composition and earnings management in Canada. Journal of Corporate Finance, 10(3), 431–457.
52. Peasnell, K. V, Pope, P. F., & Young, S. (2005). Board monitoring and earnings management : Do outside directors influence abnormal accruals? Journal of Business Finance & Accounting, 32(7‐8), 1311–1346.
53. Plian, P. H. (1995). Human capital or social networks : What constrains CEO dismissals? In Academy of Management Proceedings (Vol. 1995, pp. 37–41). Academy of Management.
54. Rediker, K. J., & Seth, A. (1995). Boards of directors and substitution effects of alternative governance mechanisms. Strategic Management Journal, 16(2), 85–99.
55. Seabright, M. a., Levinthal, D. a., & Fichman, M. (1992). Role of Individual Attachments in the Dissolution of Interorganizational Relationships. Academy of Management Journal, 35(1), 122–160. http ://doi.org/10.2307/256475
56. Shleifer, A., & Vishny, R. W. (1997). A survey of corporate governance. The Journal of Finance, 52(2), 737–783.
57. Sundaramurthy, C. (1996). Corporate governance within the context of antitakeover provisions. Strategic Management Journal, 377–394.
58. Tuggle, C. S., Sirmon, D. G., Reutzel, C. R., & Bierman, L. (2010). Commanding board of director attention : investigating how organizational performance and CEO duality affect board members’ attention to monitoring. Strategic Management Journal, 31(9), 946–968.
59. Watts, R. L., & Zimmerman, J. L. (1990). Positive accounting theory : a ten year perspective. Accounting Review, 131–156.
60. Wooldridge. J. M. (2002). Econometric Analysis ofCross Section arrd Panel Data (2nd ed.). Massachusetts Institute of Technology.
61. Wu, S., Chen, C.-M., & Lee, P.-C. (2016). Independent directors and earnings management : The moderating effects of controlling shareholders and the divergence of cash-flow and control rights. The North American Journal of Economics and Finance, 35, 153–165.
62. Zaman, M., Hudaib, M., & Haniffa, R. (2011). Corporate Governance Quality, Audit Fees and Non‐Audit Services Fees. Journal of Business Finance & Accounting, 38(1‐2), 165–197.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License [CC BY-NC-ND 4.0] that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
AJNU is committed to protecting the privacy of the users of this journal website. The names, personal particulars and e-mail addresses entered in this website will be used only for the stated purposes of this journal and will not be made available to third parties without the user's permission or due process. Users consent to receive communication from the AJNU for the stated purposes of the journal. Queries with regard to privacy may be directed to firstname.lastname@example.org.