Managerial ownership, audit committees and non-audit services

Yuan George Shan, Indrit Troshani and Janice Loftus
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Yuan George Shan: Department of Accounting and Finance, UWA Business School, The University of Western Australia, Crawley, WA, Australia
Janice Loftus: Adelaide Business School, The University of Adelaide, Adelaide, SA, Australia

Australian Journal of Management, 2021, vol. 46, issue 3, 409-436

Abstract: We extend prior research on corporate governance and non-audit services (NAS) by distinguishing between the management entrenchment region of management ownership and regions in which the interests of management and shareholders converge. Management entrenchment and convergence-of-interests regions were estimated for our sample of 5198 Australian firm-years. NAS is negatively (positively) associated with management ownership in the convergence-of-interests (entrenchment) regions. However, using a sub-sample based on firms that have audit committees, we find the association between NAS and management ownership is confined to the entrenchment region, while audit committee strength is negatively associated with NAS fees across all management ownership regions. JEL Classification: M42, M48

Keywords: Agency theory; audit committees; corporate governance; managerial ownership; non-audit service fees (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:sae:ausman:v:46:y:2021:i:3:p:409-436

DOI: 10.1177/0312896220945763

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