Quality-differentiated Auditors, Block-holders and Monitoring Mechanisms
Journal Title: Indian-Pacific Journal of Accounting and Finance - Year 2017, Vol 1, Issue 1
Abstract
Many companies are closing down after the global economic melt- down of 2008 that involved Enron. The biggest problem for such business failures as identified by practitioners and academicians is information asymmetry existing in the relationship of the managements with the shareholders. This study seeks to investigate how monitoring mechanisms influence the block-holders in 111 Nigerian non-financial listed companies to resolve this problem. The study also investigates the mediating effect of the quality-differentiated auditors on the relationship between block-holders and monitoring mechanisms. The investigation adopted quantitative analysis using Stata to test related hypotheses. The findings indicate that the block- holders significantly influence monitoring mechanisms. The results also reveal that quality-differentiated auditors positively affect monitoring mechanisms and that it significantly explains the relationship between block- holders and monitoring mechanisms. Thus, this paper adds to knowledge on the subject of monitoring mechanisms and its scopes (directorship, internal and external auditing). These findings have policy implications for the board of directors to execute their monitoring responsibilities and guide them in external audit type selection. The findings also provide policy suggestions for both the internal and external auditors. The results can also be beneficial for the regulatory agencies and government to further review the guidelines for corporate governance. The paper adds to knowledge in Sub-Saharan Africa, especially, Nigeria by examining a mediating effect to expose the relationship between block-holders and monitoring mechanisms, which are not clear or exist in the previous studies.
Authors and Affiliations
Rachael Oluyemisi Arowolo, Ayoib Che Ahmad
Keywords
Related Articles
- EP ID EP280985
- DOI -
- Views 112
- Downloads 0
Factors Influencing Tax Avoidance Activity: An Empirical Study from Indonesia Stock Exchange
This research aims to examine the influence of the firm characteristics to tax avoidance activity in the listed companies in Indonesia. This research uses the proxies of firm size, leverage, capital intensity, inventory...
The Influence of Technology Readiness on Information Technology Competencies and Civil Conflict Environment
Nowadays, the employment of information technology (IT) in accounting is vastly exercised and has turned into an everyday routine, in which the accounting and financial operations can no longer be conducted efficiently w...
Task Performance and Skills in IR 4.0: The Moderating Effect of Attitude
In the advent of artificial intelligence, internet of things, self- driving vehicles, nanotechnology, renewable energy, quantum computing, and biotechnology has taken centre stage. New markets will emerge, partly or whol...
Working Capital Management and Firm Performance
This study examines the relationship between working capital management (WCM) and firm performance during and after the financial crisis of 2007-2008 in Nigeria. During the crisis, lending conditions were deeply affected...
Effect of Risk Management Committee on Monitoring Mechanisms
Corruption has become an identification label for many African countries of which Nigeria is one of the top listed countries. Monitoring mechanisms (MM) is therefore at the forefront of issues being considered by governm...