An analysis of engagement risk differences in big four and non-big four firms

• Main Authors: Mohamad Nor, Mohamad Naimi, Abidin, Shamharir
• Format: Conference or Workshop Item
• Language: English
• Published: 2016
• Subjects: HD28 Management. Industrial Management
• Online Access: http://repo.uum.edu.my/18268/1/NIDA%20IBC%202016%201-18.pdf; http://repo.uum.edu.my/18268/
• Institution: Universiti Utara Malaysia

Previous studies reveal that engagement risk, which consist of audit risk, auditor business risk and client business risk, has an important role in audit firms’ client acceptance decision.This study examines the engagement risk differences between auditee of Big Four and non-Big Four firms in Malaysia from 2008 to 2010. The results suggest that both of the firms have different types of engagement of risk characteristics.The differences are prevalent in the case of auditor business risk and client business risk.Auditor business risk is higher for large audit firms, and their client business risk is lower than non-Big Four firms.The differences of engagement risk characteristics of both types of the firms might be due to their business strategy adaptation.