Effects of Audit Quality and the Qualifications of Audit Committee Members on the Firms' Compliance with IFRS: Evidence from Australia's listed firms

Abu Mollik, M Bepari

    Research output: A Conference proceeding or a Chapter in BookConference contribution

    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 languageEnglish
    Title of host publicationProceedings of Global Business Research Conference 2012
    EditorsZia Haqq
    Place of PublicationMelbourne
    PublisherWorld Business Institute Australia
    Pages1-44
    Number of pages44
    ISBN (Print)9781922069108
    Publication statusPublished - 2012
    EventGlobal Business Research Conference - , Mexico
    Duration: 24 Sep 201225 Sep 2012

    Conference

    ConferenceGlobal Business Research Conference
    CountryMexico
    Period24/09/1225/09/12

    Fingerprint

    Audit quality
    Audit committee
    International Financial Reporting Standards
    Qualification
    Auditors
    Big 4
    Disclosure
    Finance
    Testing
    Impairment
    Goodwill
    Corporate governance
    Multivariate regression
    Accountants
    Corporate finance and governance
    Fixed effects
    Panel regression
    Investors
    Policy implications

    Cite this

    Mollik, A., & Bepari, M. (2012). Effects of Audit Quality and the Qualifications of Audit Committee Members on the Firms' Compliance with IFRS: Evidence from Australia's listed firms. In Z. Haqq (Ed.), Proceedings of Global Business Research Conference 2012 (pp. 1-44). Melbourne: World Business Institute Australia.
    Mollik, Abu ; Bepari, M. / Effects of Audit Quality and the Qualifications of Audit Committee Members on the Firms' Compliance with IFRS: Evidence from Australia's listed firms. Proceedings of Global Business Research Conference 2012. editor / Zia Haqq. Melbourne : World Business Institute Australia, 2012. pp. 1-44
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    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.",
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    Mollik, A & Bepari, M 2012, Effects of Audit Quality and the Qualifications of Audit Committee Members on the Firms' Compliance with IFRS: Evidence from Australia's listed firms. in Z Haqq (ed.), Proceedings of Global Business Research Conference 2012. World Business Institute Australia, Melbourne, pp. 1-44, Global Business Research Conference, Mexico, 24/09/12.

    Effects of Audit Quality and the Qualifications of Audit Committee Members on the Firms' Compliance with IFRS: Evidence from Australia's listed firms. / Mollik, Abu; Bepari, M.

    Proceedings of Global Business Research Conference 2012. ed. / Zia Haqq. Melbourne : World Business Institute Australia, 2012. p. 1-44.

    Research output: A Conference proceeding or a Chapter in BookConference contribution

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    N2 - 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.

    AB - 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.

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    Mollik A, Bepari M. Effects of Audit Quality and the Qualifications of Audit Committee Members on the Firms' Compliance with IFRS: Evidence from Australia's listed firms. In Haqq Z, editor, Proceedings of Global Business Research Conference 2012. Melbourne: World Business Institute Australia. 2012. p. 1-44