Assurance service and performance. Effect of CEO characteristics

Kofi Mintah Oware and T. Mallikarjunappa

Meditari Accountancy Research, 2020, vol. 29, issue 1, 39-59

Abstract: Purpose - The purpose of this study is to investigate the impact of the choice of an assurance service provider on financial and social performance in an emerging economy. The study also examines whether the chief executive officer’s (CEO) characteristics influence the choice of an assurance service provider. Design/methodology/approach - This study uses descriptive statistics, ordinary least square and probit regression to examine the 800 firm-year observations for the period 2010–2019 and with the Indian stock market as a testing ground. Findings - The study shows that the engagement of assurance service providers reduces financial performance (stock price returns and Tobin’sq). The study also shows that consulting firms and auditing firms improve the social performance disclosure of the firm in an emerging economy. However, consulting firms outweigh auditing firms in improving social performance disclosure. Also, the implementation of mandatory reporting may slightly impede instead of an increase in social performance disclosure in an emerging economy. The study also shows that ageing CEOs prefer consulting firms over auditing firms in assurance service provision. Finally, the study shows that an extended stay in office by a CEO improves the choice of consulting firms, but the effect has a near-neutral significance. Originality/value - The choice of CEO characteristics as an independent variable adds to the factors or drivers that cause the choice of an assurance service provider in an emerging economy. Also, the measurement variable of stock price returns and Tobin’sqexpands the financial performance measurement in the relationship with assurance service providers.

Keywords: Financial performance; CEO tenure; Resource dependency theory; Social performance disclosure; Assurance service providers; CEO age (search for similar items in EconPapers)
Date: 2020
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (text/html)
https://www.emerald.com/insight/content/doi/10.110 ... d&utm_campaign=repec (application/pdf)
Access to full text is restricted to subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eme:medarp:medar-03-2020-0802

DOI: 10.1108/MEDAR-03-2020-0802

Access Statistics for this article

Meditari Accountancy Research is currently edited by Prof Charl de Villiers and Warren Maroun

More articles in Meditari Accountancy Research from Emerald Group Publishing Limited
Bibliographic data for series maintained by Emerald Support ().