Abstract
This study using Hong Kong data examines the linkages between CEO dominance (CEO and Chairman is the same individual), family ownership and control, and the likelihood that firms receive modified audit opinions. Logistic regression results using a matched pair design of 89 firm-years with modified audit opinions for 1997 to 1999 and 89 firm-years with unqualified audit opinions (control sample), show that family controlled firms are less likely to receive modified audit opinions than non-family controlled firms, and the positive association between CEO dominance and modified audit opinions is evident only for non-family controlled firms. This suggests that the abuse of power arising from CEO dominance may be mitigated by the presence of family ownership and control.
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