Corporate governance and audit features: SMEs evidence

Al-Najjar, Basil (2018) Corporate governance and audit features: SMEs evidence. Journal of Small Business and Enterprise Development, 25 (1). pp. 163-179. ISSN 1462-6004

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Purpose: The purpose of this paper is to investigate the effect of corporate governance factors on audit features, namely, audit fees and the selection of Big 4 audit firms within the UK SMEs context. Design/methodology/approach: The author uses different regression models to investigate the impact of corporate governance characteristics on audit features, and employs cross-sectional time series models as well as two-stage least squares technique. In addition, the author has used logit analysis to examine the effect of corporate governance factors on the selection of Big 4 audit firms. Findings: The author provides new evidence that governance mechanisms in SMEs affect different audit features. The results show that corporate governance mechanisms are important in determining audit fees. The author detects a positive impact of board independence, audit meeting and board size on audit fees. The author also reports evidence that governance factors determine the selection of Big 4 audit firms. In particular, the author reports that independent directors and audit diligence positively affect the decision to select Big 4 audit firms. Originality/value: This paper investigates the under-researched relationship between audit features and corporate governance using UK SMEs. In so doing, the author aims to provide new insights into this relationship within the SMEs context.

Item Type: Article
Uncontrolled Keywords: Audit, Audit fees, Audit quality, Corporate governance, SMEs, UK
Subjects: N100 Business studies
N300 Finance
Department: Faculties > Business and Law > Newcastle Business School
Depositing User: Elena Carlaw
Date Deposited: 27 Apr 2021 15:29
Last Modified: 31 Jul 2021 16:02

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