Family Presence in The Firm’s Capital and External Auditor Choice: Evidence from French Listed Firms

Salma Damak Ayadi (), Rahma Ben Salem and Asma Abdouli
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Salma Damak Ayadi: IHEC Carthage, University of Carthage, LIGUE, University of Manouba, Tunisia
Rahma Ben Salem: ISIG, University of Kairouan, LIGUE, University of Manouba, Tunisia
Asma Abdouli: University of Carthage, Tunisia

Journal of Accounting and Management Information Systems, 2020, vol. 19, issue 2, 195-214

Abstract: 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 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.

Keywords: family presence; audit quality; Top 10 French audit firms; family firms (search for similar items in EconPapers)
JEL-codes: M41 (search for similar items in EconPapers)
Date: 2020
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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