Can Substitution and Signaling Theories Explain the Relationship between External Audit Fees and the Effectiveness of Internal Corporate Governance?

1
Kamal Naser
Kamal Naser
2
Ahmad Al Kandari
Ahmad Al Kandari
3
Abdulla Al- Mutairi
Abdulla Al- Mutairi
4
Rana Nuseibeh
Rana Nuseibeh

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Can Substitution and Signaling Theories Explain the Relationship between External Audit Fees and the Effectiveness of Internal Corporate Governance? Banner
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The aim of this study is to investigate the relationship between external audit fees and the effectiveness of internal corporate governance of non-financial companies listed on Abu Dhabi Securities Exchange (ADX) by testing substitution and signaling theories. To reachthis aim, data were collected from the annual reports of all non-financial companies listed on the exchange for the year 2012. The result of the analysis showed partial support to substitution theory. Effective internal audit employed by nonfinancial Emirati companies listed on ADX appeared to be negatively related to external audit fees. The relations was, however, marginally significant.

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Funding

No external funding was declared for this work.

Conflict of Interest

The authors declare no conflict of interest.

Ethical Approval

No ethics committee approval was required for this article type.

Data Availability

Not applicable for this article.

Kamal Naser. 2014. \u201cCan Substitution and Signaling Theories Explain the Relationship between External Audit Fees and the Effectiveness of Internal Corporate Governance?\u201d. Global Journal of Management and Business Research - D: Accounting & Auditing GJMBR-D Volume 13 (GJMBR Volume 13 Issue D5): .

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GJMBR Volume 13 Issue D5
Pg. 41- 50
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Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

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February 4, 2014

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English

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The aim of this study is to investigate the relationship between external audit fees and the effectiveness of internal corporate governance of non-financial companies listed on Abu Dhabi Securities Exchange (ADX) by testing substitution and signaling theories. To reachthis aim, data were collected from the annual reports of all non-financial companies listed on the exchange for the year 2012. The result of the analysis showed partial support to substitution theory. Effective internal audit employed by nonfinancial Emirati companies listed on ADX appeared to be negatively related to external audit fees. The relations was, however, marginally significant.

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Can Substitution and Signaling Theories Explain the Relationship between External Audit Fees and the Effectiveness of Internal Corporate Governance?

Kamal Naser
Kamal Naser
Ahmad Al Kandari
Ahmad Al Kandari
Abdulla Al- Mutairi
Abdulla Al- Mutairi
Rana Nuseibeh
Rana Nuseibeh

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