Big Audit Firm: Do Thai Firms With  Good Board And Audit Committee Structures  Use It As A Monitoring Tool?

Wonlop  Buachoom; Ittidej  Seangpuang

Wonlop Buachoom Rangsit University, Pathumthani, Thailand
Ittidej Seangpuang Rangsit University, Pathumthani, Thailand

Keywords: corporate governance, board of directors, audit committee, big audit firm, audit quality, Thailand

Abstract

As big audit firm can provide better audit quality which results in good monitoring to support effective corporate governance system, this study aims to determine the relationship between corporate governance mechanisms, such as board and audit committee structures, and use of big audit firms as a monitoring function of Thai listed firms. To examine this relationship, the logistic estimator is applied for the data of 442 listed firms in the Thai stock market for 15 years from 2001 to 2015. The results from the logistic analysis show that good corporate governance mechanisms have association with use of big audit firms; that is, board independence, and audit committee meeting frequency have significant positive relationship with selecting big audit firms as monitoring tool of Thai listed firms, but dual role of leadership on board results in the opposite association.