Ownership Concentration and Audit Actions

Hidaya Al Lawati () and Zakeya Sanad
Additional contact information
Hidaya Al Lawati: Accounting Department, College of Economics and Political Science, Sultan Qaboos University, P.O. Box 50, Muscat 123, Oman
Zakeya Sanad: Accounting, Finance and Banking Department, Ahlia University, Manama P.O. Box 10878, Bahrain

Administrative Sciences, 2023, vol. 13, issue 9, 1-24

Abstract: This study presents current evidence on the impact of different corporate ownership types on audit quality in Oman and potentially in other developing countries with similar institutional environments, such as GCC countries. While previous research has primarily focused on overall ownership concentration, this study aims to examine the role of specific shareholder identities and their influence on the demand for audit quality. This research sheds light on the relationship between ownership identities and audit quality of Omani financial companies listed on the Muscat Stock Exchange from 2014 to 2020. This study employs additional analysis to mitigate potential confounding factors and ensure robust results. Additionally, a GMM test establishes the robustness of our findings, alleviating potential endogeneity concerns. The findings highlight the positive impact and significance of bank, government, and foreign ownership in promoting high audit quality. In contrast, ownership by financial institutions (non-banks) and block holder concentrations negatively and significantly impact audit quality. In addition, this study found that family members on boards play positive moderating roles in the relationship between ownership concentration and audit quality. In addition to contributing to the existing literature, this study provides valuable insights for regulatory bodies to consider the role of ownership types in their decision-making processes. Our findings also assist investors in making informed choices and offer a better understanding of how ownership structures influence audit quality for other stakeholders. The implications of this research extend beyond Oman and can be relevant to countries with similar ownership structures and regulatory frameworks.

Keywords: audit quality; ownership structure; family membership; royal membership; foreign ownership; government ownership; institution ownership; bank ownership; Oman (search for similar items in EconPapers)
JEL-codes: L M M0 M1 M10 M11 M12 M14 M15 M16 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.mdpi.com/2076-3387/13/9/206/pdf (application/pdf)
https://www.mdpi.com/2076-3387/13/9/206/ (text/html)

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:gam:jadmsc:v:13:y:2023:i:9:p:206-:d:1241858

Access Statistics for this article

Administrative Sciences is currently edited by Ms. Nancy Ma

More articles in Administrative Sciences from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().