Agency conflicts and auditing in private firms

Hope, Ole‐Kristian; Langli, John Christian; Thomas, Wayne B.

doi:10.1016/j.aos.2012.06.002

Cited by 163 publications

(105 citation statements)

References 62 publications

Supporting

Mentioning

100

Contrasting

Order By: Relevance

“…The result conforms to the findings of Hope, Langli, and Thomas (2012). The increase in the shareholding results in an increase in the ability and willingness of the second-largest holder to monitor the largest shareholder (ownermanager).…”

Section: Resultssupporting

confidence: 77%

Managerial Ownership, Horizontal Agency Costs and Monitoring Mechanisms

Arowolo¹

2016

European Proceedings of Social &Amp; Behavioural Sciences

View full text Add to dashboard Cite

Company operations are characterized by information asymmetry between the agent (management and the board of directors) and the principal (shareholders). The purpose of this study is to empirically examine the extent of monitoring mechanisms in Nigerian non-financial listed companies and the impact of managerial ownership and horizontal-agency-costs on the mechanisms. The study adopted a quantitative approach and distributed 332 questionnaires to 166 non-financial listed companies to obtain a cross-sectional data for the internal auditing. The findings give credible evidence that the horizontal-agency-cost is positively significant while managerial ownership is negatively significant. The findings of this study suggest policy implications for the monitoring roles of the board of directors as well as the internal and external auditors. Likewise, the findings are useful to the regulatory agencies and government for a further review of corporate governance guidelines. This paper contributes to knowledge by combining the three dimensions of monitoring mechanisms (directorship, internal and external auditing) in Sub-Saharan Africa.

show abstract

Section: Resultssupporting

confidence: 77%

Managerial Ownership, Horizontal Agency Costs and Monitoring Mechanisms

Arowolo¹

2016

European Proceedings of Social &Amp; Behavioural Sciences

View full text Add to dashboard Cite

show abstract

“…Chow 1982, Francis and Wilson 1988, DeFond 1992, Firth and Smith 1992, Reed et al 2000, Piot 2001 Hope et al (2012) find that there is indeed also a demand for external auditing within private firms when shareholder-manager agency costs are expected to be high. Support for the second agency cost hypothesis is also found within this private firm setting (e.g.…”

Section: Audit Demand: Literature Reviewmentioning

confidence: 99%

The demand for auditor services in wholly family-owned private firms: the moderating role of generation

Corten

Steijvers

Lybaert

2014

Accounting and Business Research

View full text Add to dashboard Cite

Former audit demand studies generally consider wholly family-owned private firms as a homogeneous group of firms that incur minimal agency costs. Family firm literature, however, argues that these firms might incur significant agency costs as well and we therefore examine audit demand in this particular type of firms. As we examine private family firms from the US, which have no audit requirement, we broaden the concept of audit demand to the demand for auditor services, which encompasses audits, reviews and compilations. Consistent with former audit demand studies, we hypothesise a negative association between management ownership and the demand for auditor services but only for first generation private family firms. We hypothesise that this relation turns positive for subsequent generation private family firms due to entrenching behaviour caused by weakened altruistic feelings between the family shareholders. Our results support this hypothesis but only regarding the demand for reviews and compilations. Therefore, our findings suggest that reviews and compilations seem to be sufficient and more cost-effective in this specific context to mitigate shareholder-manager agency costs compared to more expensive audits.Moreover, results suggest that the level of shareholder-debtholder agency costs do seem to be a driver for the demand for audits.

show abstract

“…Several studies have examined the in uence of private SMEs' agency costs on the demand of voluntary audits (Hope, Langli, & omas, 2012). Typically, SMEs show less agency con icts related to the separation of ownership and management than public, large, rms.…”

Section: The Demand Side: Do Private Smes Demand Audit?mentioning

confidence: 99%