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ADVANCED AND APPLIED SCIENCES

EISSN: 2313-3724, Print ISSN:2313-626X

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 Volume 5, Issue 8 (August 2018), Pages: 72-90

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 Review Paper

 Title: Internal corporate governance mechanisms and audit quality: Evidence from GCC region

 Author(s): Waddah Kamal Hassan 1, *, Khaled Salmen Aljaaidi 2, Shamharir Bin Abidin 3, Abdullah Masood Nasser 1

 Affiliation(s):

 1Department of Accounting, College of Business Administration, Northern Border University, Arar, Saudi Arabia
 2Accounting Department, College of Business Administration, Prince Sattam bin Abdulaziz University and Hadhramout University, Al-Kharj, Saudi Arabia
 3School of Accountancy, UUM College of Business, Universiti Utara Malaysia, Kedah, Malaysia

 https://doi.org/10.21833/ijaas.2018.08.010

 Full Text - PDF          XML

 Abstract:

Using the suggestions of agency theory alone for predicting the auditor change behavior in the context of GCC countries is inappropriate because they were developed in countries with mature market-oriented economies. In this study, we examine the association of board of directors effectiveness (board of directors independence, size, financial expertise, meetings, nationality, international experience and CEO duality) and audit committee effectiveness (audit committee independence, size, financial expertise, meetings, nationality and international experience) with the incidence of auditor change among Gulf Cooperation Council (GCC) public listed companies for the period 2005-2010. We posit that using an integration framework of agency theory, managerial grid theory, and attraction-selection-attrition has more explanatory power to predict auditor change behavior in GCC setting, taking into account economic and behavioral issues. The results show that only board of directors' effectiveness is significantly associated with the incidence of auditor change. This study finds out that the economic and the behavioral activities are related to the audit demand in the GCC. Moreover, the study suggests that regulators, especially GCC stock exchanges, should force companies to disclose all relevant information related to auditor change in a transparent and timely manner, and increase law enforcement to enhance good corporate governance practices. For companies, this study proposes that they should put more emphasis on enhancing the role and the quality of the board of directors and audit committee members, as they are involved in the decision of auditor change. 

 © 2018 The Authors. Published by IASE.

 This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/).

 Keywords: Board effectiveness, Audit committee effectiveness, Auditor change, Gulf cooperation council

 Article History: Received 13 March 2018, Received in revised form 26 May 2018, Accepted 3 June 2018

 Digital Object Identifier: 

 https://doi.org/10.21833/ijaas.2018.08.010

 Citation:

 Hassan WK, Aljaaidi KS, and Abidin SB et al. (2018). Internal corporate governance mechanisms and audit quality: Evidence from GCC region. International Journal of Advanced and Applied Sciences, 5(8): 72-90

 Permanent Link:

 http://www.science-gate.com/IJAAS/2018/V5I8/Hassan.html

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