Factors compromised the auditor independence: a study on the perception of Malaysia public listed companies / Norziana Lokman and Nur’atiqah Mohd Bakri

Lokman, Norziana and Mohd Bakri, Nur’atiqah (2019) Factors compromised the auditor independence: a study on the perception of Malaysia public listed companies / Norziana Lokman and Nur’atiqah Mohd Bakri. In: ICAM2019 – International Conference on Accounting and Management. Faculty of Accountancy, Universiti Teknologi MARA Puncak Alam, Selangor, p. 53. ISBN 978-967-17038-0-9

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Abstract

One of the critical responsibilities of the auditor is to form an independent view of the company's financial performance in the auditor’s statement. In Malaysia, the issue of auditor independence has recently become prominent due to 1MDB scandal. For that reason, the focus of this study is to determine the factors that compromise auditor independence in Malaysian Publicly Listed Companies. This study has identified four main factors which perceived to affect auditor independence. They are audit fees, auditor tenure, auditor market competition, and non-audit services (NAS). This study aims to investigate the relationship between the four compromised factors over auditor independence. A set of questionnaires was developed and distributed among 280 accountants, financial Managers and chief financial officer (CFO) of Malaysia Public Listed Companies. Each respondent is required to assess the compromised factors that contribute to auditor independence using a “5 Likert-scale”. The data collected then were tested and analyzed using correlation and regression analysis. The findings of this study revealed that auditor tenure has positively and significantly influence the auditor independence. Meanwhile, other factors have no significant influence on auditor independence. This study contributes to the literature on the topic of auditor independence and provided further evidence that long auditor tenure can enhance the independence of auditors from the perspective of listed companies. Thus, the professional bodies, regulators, and policymakers should carefully consider the recommendation on the auditor rotation and audit firm rotation before making it mandatory.

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Item Type: Book Section
Creators:
Creators
Email
Lokman, Norziana
norzi716@uitm.edu.my
Mohd Bakri, Nur’atiqah
nuratiqah.mohdbakri@yahoo.com
Subjects: H Social Sciences > HF Commerce > Accounting. Bookkeeping > Auditing. Auditors
H Social Sciences > HF Commerce > Accounting. Bookkeeping > Auditing. Auditors > Internal auditing
Divisions: Universiti Teknologi MARA, Shah Alam > Faculty of Accountancy
Page Range: p. 53
Item ID: 43756
Uncontrolled Keywords: Auditor independence; Audit fees; Non-audit services; Auditor tenure; Auditor market competition; Audit quality
URI: https://ir.uitm.edu.my/id/eprint/43756

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43756

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