Board Independence and Audit Firm Type

34 Pages Posted: 2 Dec 1998

See all articles by Mark S. Beasley

Mark S. Beasley

North Carolina State University

Kathy R. Petroni

Michigan State University - Eli Broad College of Business and Eli Broad Graduate School of Management

Date Written: October 1998

Abstract

This paper investigates the role of outside members of the board of directors in the choice of external auditor for property-casualty insurance companies. Consistent with our hypothesis that we derive from theories of both corporate governance and audit quality, we find that the likelihood of an insurer employing a brand name auditor that specializes in the insurance industry is increasing in the percentage of members of the board of directors that are considered outsiders. Interestingly, we do not find any association between board composition and the choice of using a nonspecialist brand name auditor and a non-brand name auditor.

JEL Classification: M49, G32, D23

Suggested Citation

Beasley, Mark S. and Petroni, Kathy Ruby, Board Independence and Audit Firm Type (October 1998). Available at SSRN: https://ssrn.com/abstract=137582 or http://dx.doi.org/10.2139/ssrn.137582

Mark S. Beasley (Contact Author)

North Carolina State University ( email )

Box 8113
Raleigh, NC 27695-8113
United States
919-515-6064 (Phone)
919-515-4446 (Fax)

Kathy Ruby Petroni

Michigan State University - Eli Broad College of Business and Eli Broad Graduate School of Management ( email )

East Lansing, MI 48824-1121
United States
517-432-2924 (Phone)
517-432-1101 (Fax)

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
1,423
Abstract Views
8,250
Rank
25,208
PlumX Metrics