Do political connections affect the role of independent audit committees and CEO Duality? Some evidence from Malaysian audit pricing

Mark A. Bliss, Ferdinand A. Gul, Abdul Majid

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    37 Citations (Scopus)

    Abstract

    This study examines whether political connection to firms affects the association between audit committee independence and demand for higher quality audits. In line with Carcello et al. (2002), our findings show that there is a positive association between audit committee independence and audit fees thus supporting the hypothesis that more independent audit committees demand higher audit quality. However, we find that this relationship is weaker for politically connected (PCON) firms suggesting that the independence of audit committees in Malaysian PCON firms may be compromised. Additionally, we provide evidence that PCON firms that have CEO duality are perceived by audit firms as being of higher risk than CEO duality firms without political connection.

    Original languageEnglish
    Pages (from-to)82-98
    Number of pages17
    JournalJournal of Contemporary Accounting and Economics
    Volume7
    Issue number2
    DOIs
    Publication statusPublished - Dec 2011

    Keywords

    • Audit committees
    • Audit fee pricing
    • CEO duality
    • Political connection

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