Board diversity, audit committee characteristics and audit quality: The moderating role of control-ownership wedge

Business and Economic Horizons Pub Date : 2018-07-19 DOI:10.15208/BEH.2018.42

A. Mustafa, A. Che-Ahmad, Sitraselvi Chandren

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引用次数: 31

Abstract

This study illustrates how control-ownership wedge impacts the monitoring role of the corporate board through the quality of audit services in Turkey. Turkey has made essential amendments in the field of external audit in order to enhance the quality of the financial report and integrate its own capital market with that of the EU. It would be of interest to examine the influence of these changes on clients' demand for high quality audit. The agency theory is integrated with the resource dependence theory to show that boards possess distinct incentives and ability to demand high quality audit to monitor management activities. Logistic regression and feasible generalized least squares (FGLS) were used for regression estimations. The results indicate that board demographics, cognitive and structural diversity of board of directors, audit committee characteristics and audit quality are complementary and control-ownership wedge weakens the relationship between them which is an unfavorable outcome for minority shareholders. Thus, this study proposes that regulators should increase law enforcement to enhance good corporate governance in Turkey to accommodate the unique features of wedge firms and provide a protected environment for minority shareholders.

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董事会多样性、审计委员会特征与审计质量:控制-所有权楔子的调节作用

本研究说明了控制-所有权楔子如何通过土耳其的审计服务质量影响公司董事会的监督作用。土耳其在外部审计领域进行了必要的修订，以提高财务报告的质量，并使其自身的资本市场与欧盟的资本市场相结合。研究这些变化对客户对高质量审计需求的影响是有意义的。将代理理论与资源依赖理论相结合，表明董事会具有不同的动机和能力要求高质量的审计来监督管理活动。采用Logistic回归和可行广义最小二乘(FGLS)进行回归估计。结果表明，董事会人口特征、董事会认知和结构多样性、审计委员会特征和审计质量是互补的，控制-所有权楔子削弱了它们之间的关系，这对中小股东不利。因此，本研究建议监管机构应加大执法力度，加强土耳其的良好公司治理，以适应楔形公司的独特特点，并为中小股东提供一个受保护的环境。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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Business and Economic Horizons ECONOMICS-

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期刊介绍： The Business and Economic Horizons (BEH) is an international peer-reviewed journal that publishes high quality theoretical, empirical, and review papers covering the broad spectrum of research in areas of economics, business, management, and finance. The journal aim is to bridge the gap between the theory and the observed data in these constantly developing domains. BEH Editorial Board welcomes the high-quality original research articles and review papers that verify the well-grounded and the emerging theories by employing the econometric, statistical methods or other relevant empirical methods in theoretical and applied economic analysis. BEH does not discriminate articles utilizing the non-mainstream approaches such as experimental research, institutional analysis, other variations of heterodox and developmental economic studies. Therefore, the submissions in any field of micro- and macroeconomics, business ethics, economic policy or finance are appropriate for this journal. We hope, the provided contributions will help to understand the contemporary challenges faced by the private and public sector and will establish an international forum of empirical research.