Corporate Governance and Audit Quality in Thailand
Corresponding Author(s) : Suparak Janjarasjit
Prosiding International Conference on Sustainable Innovation (ICoSI),
Vol. 3 No. 2 (2023)
Abstract
Introduction – Corporate governance has increasingly received attention from regulators in many countries in order to hold higher performance standards. By using agency theory to understand the role of corporate governance function, the well[1]structured corporate governance system can alleviate agency costs and can elevate audit quality. Purpose – To examine whether corporate governance has any effect on the audit quality in the Thai capital market, an emerging market. Methodology/Approach – Multiple regression analysis is executed to test the hypotheses using R studio. A data is collected from 479 non-financial Thai listed companies between 2018 and 2019, resulting in 945 observations. The financial information for the sample is retrieved from the data stream of SETSMART and hand-collected from the website of the Securities and Exchange Commission of Thailand and the listed company’s annual report. Findings – The results indicate that larger board size, along with greater percentage of audit committee (AC) expertise, can lead to greater audit quality while other corporate governance mechanisms do not impact the audit quality. Originality/ Value/ Implication – The results add to the literature documenting relations between financial expertise and the quality of audit, as well as to the further understanding of the perspective of audit fees in the Thai market. The solely board size is less likely to improve audit quality. However, the interaction of board size and AC financial expertise can promote the higher audit quality in the Thai capital market.
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