Strategic responses of the clients of multinational audit firms to corporate governance audit regulation

IF 1.1 Q3 BUSINESS, FINANCE
Z. Abdul-Baki, Ahmed Diab, Abdelrhman Yusuf
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引用次数: 0

Abstract

PurposeWe investigate how existing investment in strong external corporate governance mechanism—use of Big 4 audit firms—affect compliance with corporate governance audit (CGA) regulation in Nigeria and Kenya. While both countries are characterized by weak enforcement, they differ in their corporate governance audit regulatory strategies.Design/methodology/approachThe study adopts neo-institutional theory as a theoretical framework and uses logit and probit models and generalized estimating equations as empirical models to test the hypotheses developed.FindingsThe study finds that persuasive coercive isomorphism provides reputational benefits to clients of multinational audit firms in Kenya and encourages them to conduct and report their CGA. In Nigeria, clients of multinational audit firms are less likely to conduct CGA as there is no persuasive coercive isomorphism in place. We also find many internal corporate governance variables to positively influence CGA.Practical implicationsThe success of any regulation is dependent on the level of compliance by regulated entities. As clients of multinational audit firms usually have the motivation and resources to employ such high quality audit firms, it is expected that if they are well motivated, they will commit similar level of resources to conducting CGA. In Nigeria, the Financial Reporting Council should develop some persuasive measures to encourage clients of multinational audit firms to conduct CGA. In both Nigeria and Kenya, enforcement of internal corporate governance frameworks should be strengthened.Originality/valueThis is the first study to explore how regulatory strategies affect strategic responses of regulated entities to CGA regulation, introducing a new dimension to the ESG literature.
跨国审计公司客户对公司治理审计监管的战略回应
目的我们调查了尼日利亚和肯尼亚在强有力的外部公司治理机制方面的现有投资--四大审计公司的使用--如何影响公司治理审计(CGA)监管的合规性。研究采用新制度理论作为理论框架,并使用 logit 和 probit 模型以及广义估计方程作为实证模型来检验所提出的假设。研究结果研究发现,在肯尼亚,有说服力的强制同构为跨国审计公司的客户提供了声誉上的好处,并鼓励他们开展和报告公司治理审计。在尼日利亚,跨国审计事务所的客户不太可能进行公司治理审计,因为不存在有说服力的强制同构现象。我们还发现许多内部公司治理变量会对 CGA 产生积极影响。由于跨国审计公司的客户通常有动力和资源来聘请这样高质量的审计公司,如果他们有良好的动力,预计他们也会投入类似水平的资源来进行 CGA。在尼日利亚,财务报告委员会应制定一些有说服力的措施,鼓励跨国审计公司的客户进行 CGA。在尼日利亚和肯尼亚,应加强内部公司治理框架的执行力度。 原创性/价值 这是首次探讨监管策略如何影响受监管实体对 CGA 监管的战略反应的研究,为环境、社会和公司治理文献引入了一个新的维度。
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来源期刊
CiteScore
6.50
自引率
0.00%
发文量
6
期刊介绍: The objective of the Journal is to publish papers that make a fundamental and substantial contribution to the understanding of accounting phenomena. To this end, the Journal intends to publish papers that (1) synthesize an area of research in a concise and rigorous manner to assist academics and others to gain knowledge and appreciation of diverse research areas or (2) present high quality, multi-method, original research on a broad range of topics relevant to accounting, auditing and taxation. Topical coverage is broad and inclusive covering virtually all aspects of accounting. Consistent with the historical mission of the Journal, it is expected that the lead article of each issue will be a synthesis article on an important research topic. Other manuscripts to be included in a given issue will be a mix of synthesis and original research papers. In addition to traditional research topics and methods, we actively solicit manuscripts of the including, but not limited to, the following: • meta-analyses • field studies • critiques of papers published in other journals • emerging developments in accounting theory • commentaries on current issues • innovative experimental research with strong grounding in cognitive, social or anthropological sciences • creative archival analyses using non-standard methodologies or data sources with strong grounding in various social sciences • book reviews • "idea" papers that don''t fit into other established categories.
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