Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/25931
Title: Auditors' response to political connections and cronyism in Malaysia
Authors: Gul, FA
Issue Date: 2006
Publisher: Blackwell Publishing
Source: Journal of accounting research, 2006, v. 44, no. 5, p. 931-963 How to cite?
Journal: Journal of Accounting Research 
Abstract: This paper extends the literature on the role of political economy in financial reporting and auditing by testing two hypotheses. The first hypothesis predicts that there will be a greater increase in audit effort and audit fees for Malaysian firms with political connections, as a result of the Asian financial crisis, than for non-politically connected firms because these firms have a higher risk of financial misstatements. The second hypothesis predicts that the audit fees of politically connected firms will decline when capital controls are introduced by the government as a ploy to financially assist politically connected firms to rebound from the crisis, and thus reduces the risk of financial misstatements. The results show that there is a greater increase in audit fees for firms with political connections than for non-politically connected firms as a result of the Asian financial crisis. However, there is a decline in audit fees for politically connected firms after the capital controls are implemented.
URI: http://hdl.handle.net/10397/25931
ISSN: 0021-8456
DOI: 10.1111/j.1475-679X.2006.00220.x
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