Joint audit, political connections and cost of debt capital
We investigate the association between joint audit and cost of debt for a sample of non-financial, publicly listed firms from the Gulf Cooperation Council (GCC) countries. Although the conventional wisdom suggests that "two heads are better than one", empirical evidence on the beneficial i...
| Main Authors: | , , , |
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| Format: | Journal Article |
| Published: |
Wiley-Blackwell
2017
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| Online Access: | http://hdl.handle.net/20.500.11937/54661 |
| _version_ | 1848759428111663104 |
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| author | Al-Hadi, Ahmed Habib, A. Al-Yahyaee, K. Eulaiwi, B. |
| author_facet | Al-Hadi, Ahmed Habib, A. Al-Yahyaee, K. Eulaiwi, B. |
| author_sort | Al-Hadi, Ahmed |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | We investigate the association between joint audit and cost of debt for a sample of non-financial, publicly listed firms from the Gulf Cooperation Council (GCC) countries. Although the conventional wisdom suggests that "two heads are better than one", empirical evidence on the beneficial impact of joint audit has not been convincingly documented. We attempt to shed further insights into this debate, using data from the GCC countries. We document a significantly negative effect of joint audit on cost of debt in the GCC countries. This effect is more pronounced in cases where at least one of the joint audit firms is a Big 4 auditor. We then investigate whether political connections with royal families moderate the association between joint audit and cost of debt. Our results suggest that the beneficial effects of joint audits, in terms of a lower cost of debt, are greater in firms with such political connections. |
| first_indexed | 2025-11-14T09:59:43Z |
| format | Journal Article |
| id | curtin-20.500.11937-54661 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T09:59:43Z |
| publishDate | 2017 |
| publisher | Wiley-Blackwell |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-546612017-10-26T03:56:11Z Joint audit, political connections and cost of debt capital Al-Hadi, Ahmed Habib, A. Al-Yahyaee, K. Eulaiwi, B. We investigate the association between joint audit and cost of debt for a sample of non-financial, publicly listed firms from the Gulf Cooperation Council (GCC) countries. Although the conventional wisdom suggests that "two heads are better than one", empirical evidence on the beneficial impact of joint audit has not been convincingly documented. We attempt to shed further insights into this debate, using data from the GCC countries. We document a significantly negative effect of joint audit on cost of debt in the GCC countries. This effect is more pronounced in cases where at least one of the joint audit firms is a Big 4 auditor. We then investigate whether political connections with royal families moderate the association between joint audit and cost of debt. Our results suggest that the beneficial effects of joint audits, in terms of a lower cost of debt, are greater in firms with such political connections. 2017 Journal Article http://hdl.handle.net/20.500.11937/54661 10.1111/ijau.12092 Wiley-Blackwell restricted |
| spellingShingle | Al-Hadi, Ahmed Habib, A. Al-Yahyaee, K. Eulaiwi, B. Joint audit, political connections and cost of debt capital |
| title | Joint audit, political connections and cost of debt capital |
| title_full | Joint audit, political connections and cost of debt capital |
| title_fullStr | Joint audit, political connections and cost of debt capital |
| title_full_unstemmed | Joint audit, political connections and cost of debt capital |
| title_short | Joint audit, political connections and cost of debt capital |
| title_sort | joint audit, political connections and cost of debt capital |
| url | http://hdl.handle.net/20.500.11937/54661 |