Business, Management and Accounting
3 years ago

Auditor Independence Compromised: Long Tenure Weakens Oversight, Enabling Corporate Misconduct

3 views
SSRN Electronic Journal
Factors Compromising the Auditor Independence: A Study on the Perception of Malaysian Publicly Listed Companies
Norziana Lokman, Nur’atiqah Mohd Bakri

Paper Summary

The study investigates why auditor independence might be compromised in Malaysian public companies. It identifies four main factors: audit fees, audit tenure, auditor competition, and non-audit services. 280 company professionals rated these factors on a scale. Results show that long audit tenure actually improves auditor independence. However, the other factors don't have a significant effect. This suggests that requiring auditors to change firms frequently could help ensure they stay unbiased in their judgments.

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