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http://hdl.handle.net/1942/25770
Title: | Auditor choice in private firms: a stakeholders perspective | Authors: | CORTEN, Maarten STEIJVERS, Tensie LYBAERT, Nadine |
Issue Date: | 2018 | Source: | Managerial auditing journal, 33 (2), p. 146-170 | Abstract: | Purpose – This paper aims to examine whether a private firm’s demand for a Big4 auditor is influenced by the auditor choice of its main supplier, customer and competitor. The authors rely on institutional theory to explain this stakeholders’ influence. The authors also examine whether the extent to which the firm’s board of directors engages in networking moderates this influence. Design/methodology/approach – Questionnaire data are combined with archival data of 210 Belgian private firms with a statutory audit requirement. Logistic regression analysis is applied to examine to what extent firms follow their main competitor, customer and supplier in hiring a Big4 auditor. Findings – The results reveal a positive association between the firm’s choice of a Big4 auditor and its main supplier being audited by a Big4 auditor, supporting the conformance effect (isomorphism) toward suppliers as hypothesized by institutional theory. The extent of board networking, however, seems to weaken this effect. Toward competitors, a divergence effect instead of a conformance effect is found, which indicates the existence of competitive differentiation regarding auditor choice. Research limitations/implications – While prior studies mainly focus on the agency relationships between shareholders, debtholders and managers to explain auditor choice, this study also takes into account the firm’s other main stakeholders by relying on institutional theory. Both the conformance effect toward suppliers as well as the divergence effect toward competitors provide interesting additional perspectives on why auditors are demanded, leading to interesting future research opportunities. Originality/value – This paper fulfills an identified need to consider additional theories in explaining audit outcomes. | Notes: | Corten, M (reprint author), Hasselt Univ, RCEF Res Ctr Entrepreneurship & Family Firms, Hasselt, Belgium. maarten.corten@uhasselt.be; tensie.steijvers@uhasselt.be; nadine.lybaert@uhasselt.be | Keywords: | stakeholders; board of directors; institutional theory; auditor choice | Document URI: | http://hdl.handle.net/1942/25770 | ISSN: | 0268-6902 | e-ISSN: | 1758-7735 | DOI: | 10.1108/MAJ-03-2017-1535 | ISI #: | 000427154200001 | Rights: | © Emerald Publishing Limited | Category: | A1 | Type: | Journal Contribution | Validations: | ecoom 2019 |
Appears in Collections: | Research publications |
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10.1108@MAJ-03-2017-1535.pdf Restricted Access | Published version | 244.59 kB | Adobe PDF | View/Open Request a copy |
Corten et al., 2018 peer-reviewed author version.pdf Restricted Access | Peer-reviewed author version | 779.77 kB | Adobe PDF | View/Open Request a copy |
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