Family presence in the firm's capital and external auditor choice: Evidence from French listed firms

Salma Damak Ayadi, IHEC Carthage, University of Carthage, LIGUE, University of Manouba, Tunisia, Rahma Ben Salem, Asma Abdouli
2020 Contabilitate şi Informatică de Gestiune  
Research question: The study investigates the impact of family presence in the firm's capital on the demand for audit quality. Motivation: The place occupied by family businesses in the world economy and the role of external auditors as a guarantor of the quality of financial information. Idea: Auditor choice is one of the most important decisions a firm has to make. It is an important external governance mechanism. This study shows the effect of family presence in the firm's capital on auditor
more » ... capital on auditor choice. Data: In the study, a data set of 257 French listed firms during 2016 has been analysed. Tools: The study proposes a quantitative model based upon a binary logistic regression. Findings: Our results support that the family ownership structure is significantly and negatively related to the choice of higher-auditor quality. These results have allowed us to conclude that French family listed firms are less likely to appoint higher quality auditors. In summary, we find that family presence negatively affects the demand for audit quality. Family presence in the firm's capital and external auditor choice: Evidence from French listed firms Family presence in the firm's capital and external auditor choice: Evidence from French listed firms Regarding the control variables, our results show that only the variables "Indep. directors" and "Size" have a significant relationship with he choice of the external
doi:10.24818/jamis.2020.02001 fatcat:7bxhkufpajdqflkyipd3oqqc5e