Do Political Connections Affect the Role of Independent Audit Committees and CEO Duality? Some Evidence from Malaysian Audit Pricing

Bliss, M.A., Gul, F.A., Majid, A. 2011. Do Political Connections Affect the Role of Independent Audit Committees and CEO Duality? Some Evidence from Malaysian Audit Pricing, Journal of Contemporary Accounting and Economics 7, 82-98.

Posted: 1 Sep 2018

See all articles by Mark Bliss

Mark Bliss

Hong Kong Polytechnic University

Ferdinand A. Gul

Deakin University - Department of Accounting

Abdul Majid

Monash University

Date Written: 2011

Abstract

This study examines whether political connection to firms affects the association between audit committee independence and demand for higher quality audits. In line with Carcello et al. (2002), our findings show that there is a positive association between audit committee independence and audit fees thus supporting the hypothesis that more independent audit committees demand higher audit quality. However, we find that this relationship is weaker for politically connected (PCON) firms suggesting that the independence of audit committees in Malaysian PCON firms may be compromised. Additionally, we provide evidence that PCON firms that have CEO duality are perceived by audit firms as being of higher risk than CEO duality firms without political connection.

Keywords: Political connection, Audit committees, CEO duality, Audit fee pricing

JEL Classification: D72, G34, M42

Suggested Citation

Bliss, Mark and Gul, Ferdinand A. and Majid, Abdul, Do Political Connections Affect the Role of Independent Audit Committees and CEO Duality? Some Evidence from Malaysian Audit Pricing (2011). Bliss, M.A., Gul, F.A., Majid, A. 2011. Do Political Connections Affect the Role of Independent Audit Committees and CEO Duality? Some Evidence from Malaysian Audit Pricing, Journal of Contemporary Accounting and Economics 7, 82-98., Available at SSRN: https://ssrn.com/abstract=3237272

Mark Bliss (Contact Author)

Hong Kong Polytechnic University ( email )

9/F, Li Ka Shing Tower
The Hong Kong Polytechnic University
Hong Kong, Hung Hom, Kowloon
China
852 6273 7022 (Phone)
852 2356 9550 (Fax)

Ferdinand A. Gul

Deakin University - Department of Accounting ( email )

Melbourne
Australia

Abdul Majid

Monash University ( email )

23 Innovation Walk
Wellington Road
Clayton, Victoria 3800
Australia

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