The Impact of Corporate Governance and Ownership Concentration on Audit Quality in Three Asia Pacific Stock Markets

摘要

This study investigates whether corporate governance and ownership concentration influence audit fee pricing, a proxy for audit quality. Using a sample of 296 publicly listed companies on three key Asia Pacific countries' capital markets for the fiscal year 2007, the study reveals strong country differences. Compared to the audit fees of Australian firms, Hong Kong companies' audit fees are significantly higher while those in Malaysia are significantly lower. Hong Kong companies are larger and have higher ownership control than Australian companies, both of which result in higher audit fees. Importantly, despite the advent of much stronger corporate governance regimes in each of these countries, no statistical linkage is found between board independence (measured as the percentage of independent directors) and the level of audit fees.