Auditor Switch Decision of Malaysian Listed Finns: Tests of Determinants and Wealth Effect

Joher, Huson and Ali, M. and Mohd Ramidili, Shamsher and Md Nassir, Annuar (2000) Auditor Switch Decision of Malaysian Listed Finns: Tests of Determinants and Wealth Effect. Pertanika Journal of Social Sciences & Humanities, 8 (2). pp. 77-90. ISSN 0128-7702

[img] PDF
6Mb

Abstract

This article examines the economic rationale for auditor change by Malaysian listed firms by examining audit switch effect on share prices. The auditor change decision by management to retain or to change involves a switch across audit firms with different quality. Audit quality is defined by classifying the audit firms into Tier 1 (Big-5) firms and Tier 2 (non-Big 5) firms. The distinguishing attribute between the two groups of audit products is believed to be the credibility that each group brings to the audit engagement. Factors associated with the choice of audit firm and changes for firm characteristics associated with auditor choice were investigated using the logistic regression model. The findings show that the auditor switch of Malaysian listed firms is partly explained by changes in management and turnover growth. Changes in firms' characteristics such as asset growth, purchase of fixed asset to total asset, leverage and changes in financing activities explain auditor switches. There appears to be no evidence of significant wealth effect from auditor switch announcements.

Item Type:Article
Keyword:Audit switch, audit quality, revaluation effect
Faculty or Institute:Faculty of Economics and Management
Publisher:Universiti Putra Malaysia Press
ID Code:3269
Deposited By: Nur Izyan Mohd Zaki
Deposited On:25 Nov 2009 02:07
Last Modified:27 May 2013 07:06

Repository Staff Only: Edit item detail

Document Download Statistics

This item has been downloaded for since 25 Nov 2009 02:07.

View statistics for "Auditor Switch Decision of Malaysian Listed Finns: Tests of Determinants and Wealth Effect"


Universiti Putra Malaysia Institutional Repository

Universiti Putra Malaysia Institutional Repository is an on-line digital archive that serves as a central collection and storage of scientific information and research at the Universiti Putra Malaysia.

Currently, the collections deposited in the IR consists of Master and PhD theses, Master and PhD Project Report, Journal Articles, Journal Bulletins, Conference Papers, UPM News, Newspaper Cuttings, Patents and Inaugural Lectures.

As the policy of the university does not permit users to view thesis in full text, access is only given to the first 24 pages only.