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

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

Kamal Naser

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Ahmad Al Kandari

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Abdulla Al- Mutairi

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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?

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Abstract

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.

How to Cite 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

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Journal Specifications

Crossref Journal DOI 10.17406/GJMBR

Print ISSN 0975-5853

e-ISSN 2249-4588

Keywords

audit fees internal governance signaling theory substitution theory

Submission ReceivedDecember 7, 2012
Peer Review Double Blind
Handling Editor
Accepted January 4, 2013
Published January 15, 2013

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v1.2

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February 4, 2014

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Article Matrices

Total Score: 124

Country: Kuwait

Subject: Global Journal of Management and Business Research - D: Accounting & Auditing

Authors: Kamal Naser, Ahmad Al Kandari, Abdulla Al- Mutairi, Rana Nuseibeh (PhD/Dr. count: 0)

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