AUDIT COMMITTEE AND THE SELECTION OF EXTERNAL AUDITORS: THE MALAYSIAN EVIDENCE

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Takiah Mohd lskandar Wan Zanani Wan Abdullah

Abstract

The role of audit committee in corporate governance includes monitoring the system of corporate financial reporting, the process of internal control and internal audit, and the appointment of external auditors. Past studies examine the relationship between the selection of external auditors with audit committee variables, which include the activeness, independence, financial literacy of members and their director position in other companies. However, This study examines the relationships between these variables and interactions of some of the variables with the effectiveness in terms of selecting good auditors. Based on logistic regression, the study finds that independence and activeness respectively are significantly related to the selection for industry specialist external auditors. Financial literacy of members of audit committee is found to be unrelated to the selection of external auditor. However, the study finds that the interaction between independence of audit committee and frequency of meeting has negative significant relationship with the selection of industry specialist auditors.

Article Details

How to Cite
MOHD LSKANDAR, Takiah; WAN ABDULLAH, Wan Zanani. AUDIT COMMITTEE AND THE SELECTION OF EXTERNAL AUDITORS: THE MALAYSIAN EVIDENCE. Management & Accounting Review (MAR), [S.l.], v. 3, n. 1, p. 123-136, june 2004. ISSN 2550-1895. Available at: <http://arionline.uitm.edu.my/ojs/index.php/MAR/article/view/526>. Date accessed: 19 aug. 2018.
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