Moderating Effect of IFRS on Ownership-Structures–Audit-Quality Relationship for Listed Firms in Saudi Arabia (original) (raw)

The Journal of Contemporary Issues in Business and Government, 2021

Abstract

This research investigates the moderating effect of the IFRS adoption on the link between ownership structures and audit quality for listed nonfinancial firms in Saudi Arabia .Data were collected from 165 listed non-financial firms in Saudi Arabia over sixyear periods that represent the pre-IFRS adoption period of 2013 to 2015 and post-IFRS adoption period of 2016 to 2018. Managerial ownership and concentrated ownership were interacted with IFRS adoption for discretionary accruals, a proxy of audit quality, factoring in instrumental variables in the constructs. Dynamic panel model estimation utilizing the two-stage generalized moment method (2 SGMM) was used to analyze the data because of its efficacy in mitigating possible endogeneity problems. The study’s findings reveal that ownership structure weakens audit quality in the pre IFRS adoption period and that the interaction effect of IFRS with ownership structure leads to high audit quality for listed nonfinancial firms in Saudi Ar...

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