Untitled

Velury, Uma; Reisch, John T.; O'Reilly, Dennis M.

doi:10.1023/a:1024855605207

Cited by 72 publications

(11 citation statements)

References 26 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…Table 5 Among the control variables, the total assets, number of segments, negative earnings, institutional investors, and conglomerate-affiliated firms took positive and statistically significant values. In addition, the coefficients of the control variables were generally consistent with prior research [22,41,64,66,[69][70][71]. On the other hand, return on assets showed significantly negative values, which is consistent with prior results [22,41].…”

Section: Effect Of Foreign Monitoring On Audit Feessupporting

confidence: 88%

See 1 more Smart Citation

Foreign Monitoring and Audit Quality: Evidence from Korea

2018

View full text Add to dashboard Cite

This study investigates the effects of both foreign majority shareholders and foreign investors’ participation in the board of directors on audit quality, as reflected by auditor size and audit fees. In addition, the study examines the moderating effect of an agency problem on the relationship between foreign investors and the monitoring of audit quality. Using 1574 non-financial firm-year observations listed on the Korea Stock Exchange from 2000 to 2003, we find that the presence of foreign investors such as foreign block shareholders and foreign outside directors increases audit quality. At the same time, the monitoring role of foreign block shareholders is more powerful than that of foreign external directors. Moreover, the foreign block shareholders in professional management-controlled firms exert a more profound influence on audit quality than do those in owner-controlled ones. These test results imply that foreign investors with independence, expertise, and monitoring incentives could play an important role in improving the corporate governance system in Korea, which in turn would not only enhance firm value, but also strengthen the sustainability of Korean companies.

show abstract

Section: Effect Of Foreign Monitoring On Audit Feessupporting

confidence: 88%

“…To control for the effects of monitoring on audit quality, we included institutional investor ownership and conglomerates-affiliated companies [70,71]. We measured institutional investor ownership as the number of shares held by institutional investors divided by the total number of shares outstanding in the firm.…”

Section: Control Variablesmentioning

confidence: 99%

Foreign Monitoring and Audit Quality: Evidence from Korea

2018

View full text Add to dashboard Cite

show abstract

“…Prior studies suggest that different types of MLS may have different incentives and, therefore, different demands for high-quality auditors. For example, Velury et al (2003) demonstrate that large institutional shareholders are likely to be interested in high-quality auditors because they demand higher levels of accounting quality to facilitate their monitoring activities. Guedhami et al (2009) find that foreign large shareholders prefer to hire Big Four auditors to improve financial reporting because high-quality accounting information allows them to monitor and protect their investments and efficiently allocate capital.…”

Section: Hypotheses Developmentmentioning

confidence: 99%

Multiple large shareholders and auditor choice: evidence from China

Feng

Wen

et al. 2023

MAJ

View full text Add to dashboard Cite

Purpose This study aims to examine whether a firm's demand for high-quality auditors is influenced by multiple large shareholders (MLS). As one type of ownership structure, MLS have gained popularity in China recently and have different types of large shareholders, including large institutional shareholder, large foreign shareholder and large state shareholder. The authors also examine whether different types of MLS have heterogeneous impacts on appointing high-quality auditors. Design/methodology/approach With a sample of 27,131 firm-year observations from Chinese public companies from 2003 to 2018, the authors use multivariate regressions to examine the effect of MLS on auditor choice. Heckman two-stage analysis, a firm fixed effects model, propensity score matching and difference-in-differences test are used as robustness checks. Findings This paper finds that the presence and power of MLS increase the likelihood of appointing high-quality auditors. With regard to the types of MLS, large institutional shareholders and foreign shareholders have significant positive effects on appointing high-quality auditors, while the presence of state-owned large shareholders has no effect on auditor choice. Further analyses reveal that the positive effect of MLS on high-quality auditor choice is more pronounced in firms with severe agency problems and information asymmetry. Taken together, these results suggest that MLS play a monitoring role by demanding high-quality auditors. Originality/value This paper contributes to the literature on the determinants of auditor choice. While prior studies primarily focus on the impact of concentrated ownership structure, corporate governance and the pressure from stakeholders on auditor choice, this paper complements the literature by providing evidence from the heterogeneous effects of different types MLS. This paper also extends the literature on the consequences of MLS from the perspective of auditor choice.

show abstract

“…The study of Smith (1996) notes that shareholders' proposals at the general assembly meetings usually receive greater care and are put into action faster, as the percentage of institutional ownership in the company increases, which is reflected positively on the financial and operational performance of this company. Velury et al (2003) also stress that institutional investors often prefer high-quality financial statements, encouraging companies to seek the qualified audit firms to perform their audit activities in high quality.…”

Section: Theoretical Framework and Hypothesesmentioning

confidence: 99%

The effect of the ownership structure on earnings management practices

Maswadeh

2018

Investment Management and Financial Innovations

View full text Add to dashboard Cite

The objective of this study is to investigate the effect of the ownership structure, which includes concentration ownership, institutional ownership and foreign ownership in the light of the debt ratio and company size as controlling variables in limiting the earnings management practices of the Jordanian industrial companies for the period 2012–2016. The hypotheses of the study were tested using the multiple regression models. Among the most prominent findings of the study are: the explanatory factor (R2) for the independent and control variables accounts for 38% of the change in the earnings management of the Jordanian industrial companies, moreover, a significant effect of the concentration ownership was found in the limitation of earnings management practices; while, there was no significant influence of institutional ownership and foreign ownership on the earnings management practices in Jordanian industrial companies. Major limitation to this study is the only considered listed industrial Jordanian firms. Thus, the generalization of the results to other sectors and diverse economic conditions and regulations may be constrained. Finally, Jordanian policymaker reform policies motivate companies to increase their interest on concentration ownership structure, as the study showed the significant effect of the concentration ownership in the limitation of earnings management practice.

show abstract

Untitled

Cited by 72 publications

References 26 publications

Foreign Monitoring and Audit Quality: Evidence from Korea

Foreign Monitoring and Audit Quality: Evidence from Korea

Multiple large shareholders and auditor choice: evidence from China

The effect of the ownership structure on earnings management practices

Contact Info

Product

Resources

About