Auditor switch decision of Malaysian listed firms: tests of determinants and wealth effect
This article examines the economic rationale for auditor change by Malaysian listed firms by examining audit switch effect on share prices. The auditor change decision by management to retain or to change involves a switch across audit firms with different quality. Audit quality is defined by class...
| Main Authors: | , , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Universiti Putra Malaysia Press
2000
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| Online Access: | http://psasir.upm.edu.my/id/eprint/3269/ http://psasir.upm.edu.my/id/eprint/3269/1/Auditor_Switch_Decision_of_Malaysian_Listed_Finns.pdf |
| _version_ | 1848839482560741376 |
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| author | Ahmed, Huson Joher Ali Ali, M. Ramadilli Mohd, Shamsher Mohamad Md Nassir, Annuar Syed Mohamed, Mohamed Ariff |
| author_facet | Ahmed, Huson Joher Ali Ali, M. Ramadilli Mohd, Shamsher Mohamad Md Nassir, Annuar Syed Mohamed, Mohamed Ariff |
| author_sort | Ahmed, Huson Joher Ali |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | This article examines the economic rationale for auditor change by Malaysian listed firms by examining audit switch effect on share prices. The auditor change decision by management to retain or to change involves a switch across audit firms with different quality. Audit quality is
defined by classifying the audit firms into Tier 1 (Big-5) firms and Tier 2 (non-Big 5) firms. The distinguishing attribute between the two groups of audit products is believed to be the credibility that each group brings to the audit engagement. Factors associated with the choice of audit firm and changes for firm characteristics associated with auditor choice were investigated using the logistic regression model. The findings show that the auditor switch of Malaysian listed firms is partly explained by changes in management and turnover growth. Changes in firms' characteristics such as asset growth, purchase of fixed asset to total asset, leverage and changes in financing
activities explain auditor switches. There appears to be no evidence of significant wealth effect from auditor switch announcements. |
| first_indexed | 2025-11-15T07:12:09Z |
| format | Article |
| id | upm-3269 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T07:12:09Z |
| publishDate | 2000 |
| publisher | Universiti Putra Malaysia Press |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-32692015-09-11T01:43:31Z http://psasir.upm.edu.my/id/eprint/3269/ Auditor switch decision of Malaysian listed firms: tests of determinants and wealth effect Ahmed, Huson Joher Ali Ali, M. Ramadilli Mohd, Shamsher Mohamad Md Nassir, Annuar Syed Mohamed, Mohamed Ariff This article examines the economic rationale for auditor change by Malaysian listed firms by examining audit switch effect on share prices. The auditor change decision by management to retain or to change involves a switch across audit firms with different quality. Audit quality is defined by classifying the audit firms into Tier 1 (Big-5) firms and Tier 2 (non-Big 5) firms. The distinguishing attribute between the two groups of audit products is believed to be the credibility that each group brings to the audit engagement. Factors associated with the choice of audit firm and changes for firm characteristics associated with auditor choice were investigated using the logistic regression model. The findings show that the auditor switch of Malaysian listed firms is partly explained by changes in management and turnover growth. Changes in firms' characteristics such as asset growth, purchase of fixed asset to total asset, leverage and changes in financing activities explain auditor switches. There appears to be no evidence of significant wealth effect from auditor switch announcements. Universiti Putra Malaysia Press 2000-09 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/3269/1/Auditor_Switch_Decision_of_Malaysian_Listed_Finns.pdf Ahmed, Huson Joher Ali and Ali, M. and Ramadilli Mohd, Shamsher Mohamad and Md Nassir, Annuar and Syed Mohamed, Mohamed Ariff (2000) Auditor switch decision of Malaysian listed firms: tests of determinants and wealth effect. Pertanika Journal of Social Sciences & Humanities, 8 (2). pp. 77-90. ISSN 0128-7702; ESSN: 2231-8534 http://www.pertanika.upm.edu.my/view_archives.php?journal=JSSH-8-2-9 |
| spellingShingle | Ahmed, Huson Joher Ali Ali, M. Ramadilli Mohd, Shamsher Mohamad Md Nassir, Annuar Syed Mohamed, Mohamed Ariff Auditor switch decision of Malaysian listed firms: tests of determinants and wealth effect |
| title | Auditor switch decision of Malaysian listed firms: tests of determinants and wealth effect |
| title_full | Auditor switch decision of Malaysian listed firms: tests of determinants and wealth effect |
| title_fullStr | Auditor switch decision of Malaysian listed firms: tests of determinants and wealth effect |
| title_full_unstemmed | Auditor switch decision of Malaysian listed firms: tests of determinants and wealth effect |
| title_short | Auditor switch decision of Malaysian listed firms: tests of determinants and wealth effect |
| title_sort | auditor switch decision of malaysian listed firms: tests of determinants and wealth effect |
| url | http://psasir.upm.edu.my/id/eprint/3269/ http://psasir.upm.edu.my/id/eprint/3269/ http://psasir.upm.edu.my/id/eprint/3269/1/Auditor_Switch_Decision_of_Malaysian_Listed_Finns.pdf |