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Corporate governance and audit features: SMEs evidence

Al-Najjar, Basil (2018) Corporate governance and audit features: SMEs evidence. Journal of Small Business and Enterprise Development, 25 (1). pp. 163-179. ISSN 1462-6004

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The purpose of this paper is to investigate the effect of corporate governance factors on audit features, namely, audit fees and the selection of Big 4 audit firms within the UK SMEs context.

The author uses different regression models to investigate the impact of corporate governance characteristics on audit features, and employs cross-sectional time series models as well as two-stage least squares technique. In addition, the author has used logit analysis to examine the effect of corporate governance factors on the selection of Big 4 audit firms.

The author provides new evidence that governance mechanisms in SMEs affect different audit features. The results show that corporate governance mechanisms are important in determining audit fees. The author detects a positive impact of board independence, audit meeting and board size on audit fees. The author also reports evidence that governance factors determine the selection of Big 4 audit firms. In particular, the author reports that independent directors and audit diligence positively affect the decision to select Big 4 audit firms.

This paper investigates the under-researched relationship between audit features and corporate governance using UK SMEs. In so doing, the author aims to provide new insights into this relationship within the SMEs context.

Item Type: Article
Subjects: H Social Sciences > HG Finance
Schools: Huddersfield Business School
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Depositing User: Sharon Beastall
Date Deposited: 14 Feb 2018 10:46
Last Modified: 28 Aug 2021 15:14


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