Abstract

This study investigates three unique governance mechanisms of the recently developed Kuwaiti market: audit pair choice (joint audit), dominant blockholders and the adoption of Islamic business principles. The requirement to appoint at least two external auditors creates a more complex agency problem than does the traditional dichotomy of Big N/non–Big N auditor. Using a sample of all non-bank listed firms in the Kuwait Stock Exchange (KSE), this study examines the effect of dominant blockholders in the ownership structure and the adoption of Islamic business principles on audit pair choice. Following this, this study explores whether the resultant audit pair choice is associated with the quality of the reported financial information.

Year Manuscript Completed

2014

Disciplines

Accounting | Corporate Finance | Finance and Financial Management | International Business

Keywords

Corporate governance; institutional investors; Islamic business principles; joint audit; Kuwait; royal family.

Primary Language of Manuscript

EN

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