International Journal of Multidisciplinary: Applied Business and Education Research
Vol 2 No 2 (2021): International Journal of Multidisciplinary: Applied Business and Education Resear

The Effect of Ownership Structure and Audit Quality on Firm Performance

Dramani Angsoyiri (Unknown)



Article Info

Publish Date
11 Feb 2021

Abstract

The study examined the effect of ownership structure and audit qual-ity on firm performance of listed companies in Ghana. The research employed a quantitative research approach; secondary data was ex-tracted from various annual reports and financial statements of the selected companies. The target population was all 42 listed compa-nies on the Ghana Stock Exchange. The sample size was 20 companies selected from all industries. The study period was 2013-2018 re-sulted in 160 firm-yearly empirical observations. The study used re-turn on asset (ROA) and return on equity (ROE) as the performance measure. Ownership structure was measured using managerial own-ership and institutional ownership, audit quality was also measured with the auditor’s reputation, audit committee size and audit commit-tee independence. The control variables used were board size and firm size. The researcher found a weak positive correlation between institutional and managerial ownership and firm performance. More-over, there was a positive effect of audit quality on firm performance. It implies that the engagement of the services of the Big 4 audit firms has an incremental effect on firm performance. Audit committee size posited a positive effect on firm performance whereas audit commit-tee independence was seen to harm firm performance. Similarly, board independence showed a positive effect on ROE and a negative effect on ROA. Board size, however, indicated a positive effect on firm performance. The researcher recommended the pressing need of di-versifying shareholdings in firms as a sweetener to attract more skills and expertise among shareholders that can be tapped to enhance the performance of firms. However, managers should be protected from unnecessary shareholding meddling.

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Journal Info

Abbrev

ijmaber

Publisher

Subject

Civil Engineering, Building, Construction & Architecture Computer Science & IT Economics, Econometrics & Finance Environmental Science Medicine & Pharmacology

Description

International Journal of Multidisciplinary: Applied Business and Education Research is a peer-reviewed in a monthly basis that publishes full-length papers. it is to enhance the dissemination of knowledge across the multidisciplinary community. We are particularly interested in papers relevant to ...