Abstract
This study examines the effect of audit quality and the audit committee members‟ accounting and finance background on the firms‟ compliance with IFRS for goodwill impairment testing and disclosure. Big-4 and non-Big-4 auditors have been used respectively as a proxy for higher and lower audit quality. Differences in the compliance among the clients of Big-4 auditors and between the clients of Big-4 and non-Big-4 auditors are examined. Several univariate tests, multivariate regressions and fixed effect panel regressions are used to confirm the findings. Although, we observe a low level of compliance across the clients of all auditors, statistically significant differences in compliance levels are found between the clients of Big-4 versus non-Big-4 auditors. These differences in compliance levels are also significant among the clients of Big-4 auditors. On several aspects of the compliance and disclosure issues, the clients of different Big-4 auditors perform differently. The findings also suggest that audit committee members‟ accounting and finance background is positively associated with firms‟ compliance with IFRS for goodwill impairment testing and disclosure. The findings of this study have important implications for researches in accounting, finance and corporate governance that usually consider Big-4 auditors versus non-Big-4 auditors as a proxy for audit quality. The findings also have important policy implications for the transition to the IFRS. Moreover, the findings justify the recent provision in the corporate governance directive regarding the accounting and finance background of the audit committee members. The findings of the study may also be of interest to regulators, auditors, investors, accountants and academics.
Original language | English |
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Title of host publication | Proceedings of Global Business Research Conference 2012 |
Editors | Zia Haqq |
Place of Publication | Melbourne |
Publisher | World Business Institute Australia |
Pages | 1-44 |
Number of pages | 44 |
ISBN (Print) | 9781922069108 |
Publication status | Published - 2012 |
Event | Global Business Research Conference - , Mexico Duration: 24 Sept 2012 → 25 Sept 2012 |
Conference
Conference | Global Business Research Conference |
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Country/Territory | Mexico |
Period | 24/09/12 → 25/09/12 |