Determinants of industry expertise outsourced IAF: Do company and auditor attributes affect the selection?

Outsourcing the internal aud it function (IAF) is a worldwide practice attractive to companies, practitioners and regulators because it is believed that providers of this function are objective and competent and can provide high-quality audit. This study explores the potential influence of company a...

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Autores principales:	Saeed Rabea Baatwah, Khaled Salmen Aljaaidi, Ehsan Saleh Almoataz, Mohammed Saleh Bajaher
Formato:	article
Lenguaje:	EN
Publicado:	Taylor & Francis Group 2021
Materias:	iaf outsourced iaf industry expertise company characteristics auditor characteristics Business HF5001-6182 Management. Industrial management HD28-70
Acceso en línea:	https://doaj.org/article/90956d11d6954ed19c87288cc3b42f42
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spelling	oai:doaj.org-article:90956d11d6954ed19c87288cc3b42f422021-12-02T16:25:39ZDeterminants of industry expertise outsourced IAF: Do company and auditor attributes affect the selection?2331-197510.1080/23311975.2021.1938931https://doaj.org/article/90956d11d6954ed19c87288cc3b42f422021-01-01T00:00:00Zhttp://dx.doi.org/10.1080/23311975.2021.1938931https://doaj.org/toc/2331-1975Outsourcing the internal aud it function (IAF) is a worldwide practice attractive to companies, practitioners and regulators because it is believed that providers of this function are objective and competent and can provide high-quality audit. This study explores the potential influence of company and auditor characteristics on selecting outsourced IAF providers with industry expertise. Using 334 observations for non-financial companies that outsourced this function to an external provider over the period 2010–2017, logistic regression suggests that company characteristics such as size, issue of new equity, age, and total accruals significantly determine the selection of industry-expertise outsourced IAF (IEOIAF) providers. We report similar findings when considering alternative approaches for measuring industry expertise, using a matching sample method, and controlling for the potential effect of endogeneity. In additional analysis, we explore these determinants, classifying the IEOIAF providers into big4 or second-tier audit firms; we find that size, leverage, quick ratio, concentrated ownership, loss, assets turnover, age, total accruals, external auditor type, and audit fees are the major determinants in the choice of an IEOIAF provider. Our study is of interest to a variety of users and provides the first empirical evidence for the determinants of outsourced IAF providers with industry expertise.Saeed Rabea BaatwahKhaled Salmen AljaaidiEhsan Saleh AlmoatazMohammed Saleh BajaherTaylor & Francis Grouparticleiafoutsourced iafindustry expertisecompany characteristicsauditor characteristicsBusinessHF5001-6182Management. Industrial managementHD28-70ENCogent Business & Management, Vol 8, Iss 1 (2021)
institution	DOAJ
collection	DOAJ
language	EN
topic	iaf outsourced iaf industry expertise company characteristics auditor characteristics Business HF5001-6182 Management. Industrial management HD28-70
spellingShingle	iaf outsourced iaf industry expertise company characteristics auditor characteristics Business HF5001-6182 Management. Industrial management HD28-70 Saeed Rabea Baatwah Khaled Salmen Aljaaidi Ehsan Saleh Almoataz Mohammed Saleh Bajaher Determinants of industry expertise outsourced IAF: Do company and auditor attributes affect the selection?
description	Outsourcing the internal aud it function (IAF) is a worldwide practice attractive to companies, practitioners and regulators because it is believed that providers of this function are objective and competent and can provide high-quality audit. This study explores the potential influence of company and auditor characteristics on selecting outsourced IAF providers with industry expertise. Using 334 observations for non-financial companies that outsourced this function to an external provider over the period 2010–2017, logistic regression suggests that company characteristics such as size, issue of new equity, age, and total accruals significantly determine the selection of industry-expertise outsourced IAF (IEOIAF) providers. We report similar findings when considering alternative approaches for measuring industry expertise, using a matching sample method, and controlling for the potential effect of endogeneity. In additional analysis, we explore these determinants, classifying the IEOIAF providers into big4 or second-tier audit firms; we find that size, leverage, quick ratio, concentrated ownership, loss, assets turnover, age, total accruals, external auditor type, and audit fees are the major determinants in the choice of an IEOIAF provider. Our study is of interest to a variety of users and provides the first empirical evidence for the determinants of outsourced IAF providers with industry expertise.
format	article
author	Saeed Rabea Baatwah Khaled Salmen Aljaaidi Ehsan Saleh Almoataz Mohammed Saleh Bajaher
author_facet	Saeed Rabea Baatwah Khaled Salmen Aljaaidi Ehsan Saleh Almoataz Mohammed Saleh Bajaher
author_sort	Saeed Rabea Baatwah
title	Determinants of industry expertise outsourced IAF: Do company and auditor attributes affect the selection?
title_short	Determinants of industry expertise outsourced IAF: Do company and auditor attributes affect the selection?
title_full	Determinants of industry expertise outsourced IAF: Do company and auditor attributes affect the selection?
title_fullStr	Determinants of industry expertise outsourced IAF: Do company and auditor attributes affect the selection?
title_full_unstemmed	Determinants of industry expertise outsourced IAF: Do company and auditor attributes affect the selection?
title_sort	determinants of industry expertise outsourced iaf: do company and auditor attributes affect the selection?
publisher	Taylor & Francis Group
publishDate	2021
url	https://doaj.org/article/90956d11d6954ed19c87288cc3b42f42
work_keys_str_mv	AT saeedrabeabaatwah determinantsofindustryexpertiseoutsourcediafdocompanyandauditorattributesaffecttheselection AT khaledsalmenaljaaidi determinantsofindustryexpertiseoutsourcediafdocompanyandauditorattributesaffecttheselection AT ehsansalehalmoataz determinantsofindustryexpertiseoutsourcediafdocompanyandauditorattributesaffecttheselection AT mohammedsalehbajaher determinantsofindustryexpertiseoutsourcediafdocompanyandauditorattributesaffecttheselection
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Determinants of industry expertise outsourced IAF: Do company and auditor attributes affect the selection?

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