Akademik Veri Yönetim Sistemi
INTERNATIONAL JOURNAL OF CONTEMPORARY ECONOMICS AND ADMINISTRATIVE SCIENCES, cilt.10, sa.2, ss.432-450, 2020 (ESCI)
Corporate governance mechanism and independent auditing are important factors ensuring that the financial reporting system operates in an effective and quality manner. Hence, independent auditor selection is of significant importance for providing reliable information to the financial table users as well as for increasing auditing quality. The aim of this study is to investigate the impact of corporate governance applications and firm characteristics on independent auditor selection. The study covers the period between 2015-2018. A total of 583 firm-year observations on sectors traded at Borsa Istanbul were analyzed via logistics regression model. Whether or not the firms work with the Big Four auditing firms was used as an auditor selection indicator. In addition, while the number of independent members in the executive board, ownership concentration (share of the largest shareholder, share of the second largest shareholder, share of the third largest shareholder and free float ratio) and the number of auditing committee members were used as corporate governance indicators; firm size, leverage and return on assets (ROA) were used as indicators of firm characteristics. Based on the analysis results, a positive and statistically significant correlation was observed between the number of independent members, share of the largest shareholder, firm leverage, ROA and auditor selection. Moreover, the findings also point out a statistically significant relationship between firm year used as control variable and auditor selection.