Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments March 2001 erstellt
Beschreibung:
In emerging markets, the concentration of corporate ownership has created agency conflicts between controlling owners and minority shareholders. Conventional corporate control mechanisms such as boards of directors and takeovers are typically weak in containing the agency problem. This study examines whether external independent auditors could be employed as monitors and as bonding mechanisms to alleviate the agency conflict. Using a broad sample of firms from eight East Asian economies, we document that firms are more likely to employ Big Five auditors when they are more subject to the agency problem imbedded in their ultimate ownership structure. This documented relation between auditor choice and the agency problem is not found in prior research in the U.S. and the U.K. where corporate ownership is more diffused and alternative governance mechanisms are more abundant. In addition, among East Asian auditees subject to the agency problem, Big Five auditors charge a higher fee and set a lower audit qualification threshold while non-Big Five auditors do not. Taken together, the evidence suggests that Big Five auditors in emerging markets do have a corporate governance role