Auditor choice and institutional investor characteristics after the Enron scandal in the French context

Jamel Azibi, Hubert Tondeur and Mohamed Tahar Rajhi

International Journal of Economics and Accounting, 2011, vol. 2, issue 1, 32-52

Abstract: This study examines the association between the quality of audit and the characteristics of institutional investors, using French data. After the Enron scandal, the perception of the Big 4 by French institutional investors changed. Our first hypothesis focuses on the relation between French institutional investors and the choice of Big 4 auditors. Our second hypothesis deals with the perception of the foreign institutional investors to choose one of the Big 4 auditors due to the lack of investor protection in France and the failure of Enron. We tested our hypotheses on a sample of 144 companies listed on SBF 250, obtained from Worldscope data between 2000 and 2007. Empirical results show a negative and statistically significant link between the choices of one of Big 4 auditor by French institutional investors after the Enron scandal, whereas there is a positive and statistically insignificant link between the foreign institutional investor and the Big 4 appointment after 2002.

Keywords: audit quality; auditor choice; institutional investors; Enron scandal; France; auditing. (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ids:ijecac:v:2:y:2011:i:1:p:32-52

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