Audits, Audit Quality and Signalling Mechanisms: Concentrated Ownership Structures

American Research Journal of Humanities and Social Sciences, Volume 1, Issue 2, April 2015

15 Pages Posted: 29 Dec 2013 Last revised: 5 Jan 2016

Date Written: December 28, 2013

Abstract

Do jurisdictions with concentrated ownership structures require less reliance on audits as corporate governance mechanisms and devices? Why do concentrated ownership structures still prevail in certain jurisdictions which are considered to be “market based corporate governance systems”? More importantly, if failures and causes of recent financial crises are principally attributable to the fact that market based corporate governance mechanisms, such as financial regulators, are not optimally performing their functions, why is the role of audits still paramount in such jurisdictions? These are amongst some of the questions which this paper attempts to address.

The ever increasing growth of institutional investors in jurisdictions – particularly those jurisdictions with predominantly concentrated ownership structures, with their increased stakes in corporate equity, also raises the issue of accountability and the question as regards whether increased accountability is fostered where institutional investors assume a greater role – as opposed to position which exists where increased stake of family holdings (family controlled structures) arises.

Keywords: audit quality, corporate governance, concentrated ownership structures, capital market economies, institutional investors

Suggested Citation

Ojo PhD, Marianne, Audits, Audit Quality and Signalling Mechanisms: Concentrated Ownership Structures (December 28, 2013). American Research Journal of Humanities and Social Sciences, Volume 1, Issue 2, April 2015. Available at SSRN: https://ssrn.com/abstract=2372511 or http://dx.doi.org/10.2139/ssrn.2372511

Marianne Ojo PhD (Contact Author)

American Accounting Association ( email )

5717 Bessie Drive
Sarasota, FL 34233-2399
United States

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