Audit committee chairman and auditor choice: an analysis of first-tier, second-tier, and third-tier accounting firms
The audit committee (AC) plays a crucial role in corporate governance, particularly in financial reporting and the selection of independent auditors. Despite this, the literature on the role of the AC chair is sparse. This study seeks to elucidate the influence of AC chairman characteristics on audi...
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| Main Authors: | , , , |
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| Format: | Article |
| Language: | English |
| Published: |
Taylor & Francis Group
2025-12-01
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| Series: | Cogent Business & Management |
| Subjects: | |
| Online Access: | https://www.tandfonline.com/doi/10.1080/23311975.2024.2444546 |
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| Summary: | The audit committee (AC) plays a crucial role in corporate governance, particularly in financial reporting and the selection of independent auditors. Despite this, the literature on the role of the AC chair is sparse. This study seeks to elucidate the influence of AC chairman characteristics on auditor selection. The AC chairman’s characteristics are proxied by expertise, tenure, gender, and nationality. Additionally, it broadens the scope of existing literature by categorizing accounting firms into three groups: first-tier, second-tier, and third-tier, as opposed to the traditional dichotomy of Big Four and non-Big Four. The research focuses on manufacturing companies on the Indonesia Stock Exchange from 2017 to 2022. Findings indicate that AC chairs with financial or accounting expertise are more likely to engage first-tier and second-tier accounting firms as independent auditors. In contrast, statistical analysis shows that the tenure of the AC chairman does not significantly impact the choice between first-tier and second-tier auditors. Furthermore, female and foreign AC chairs display a preference for hiring first-tier and second-tier firms over third-tier ones. |
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| ISSN: | 2331-1975 |