The Demand for the UK Small Company Audit: An Agency Perspective
There has been considerable debate in recent years concerning the value of the small company audit. This paper aims to explore the impact of the introduction of deregulation of the small company audit in the United Kingdom in 1994. It seeks to identify why small companies may still demand voluntary...
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| Format: | text |
| Language: | English |
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Institutional Knowledge at Singapore Management University
2001
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| Online Access: | https://ink.library.smu.edu.sg/soa_research/673 http://dx.doi.org/10.1177/0266242601192004 |
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| Institution: | Singapore Management University |
| Language: | English |
| Summary: | There has been considerable debate in recent years concerning the value of the small company audit. This paper aims to explore the impact of the introduction of deregulation of the small company audit in the United Kingdom in 1994. It seeks to identify why small companies may still demand voluntary audits in the absence of a statutory requirement. Theoretical and economic factors and rationales affecting small company management choice to engage auditing are examined. Following a survey sent to small companies qualifying for audit exemption, several hypotheses underlying the demand for audits in an unregulated environment are empirically tested in a logistic regression model. Some support is found for the agency, or stewardship, hypotheses in small company choice to engage auditing. |
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