The Effect of Corporate Governance on Audit Quality: Evidence from Jordanian Listed Firms

Abstract

Aims: The current study's goal is to investigate how corporate governance impacts audit quality. Study design: utilizing 624 observations from a panel of 78 firms that were listed on the Amman Stock Exchange (ASE) over 8 years, from 2012 to 2019. 
 Methodology: Regression with panel-corrected standard error (PCSE) was used to correct heteroskedasticity and serial correlation and analyze the data.
 Results: According to the study, board independence and family ownership have a negative impact on audit quality, whereas board size and concentration ownership have a positive impact. On the other hand, the study demonstrates that managerial ownership and the number of women on the board have no impact on the quality of the audit. 
 Conclusion: This study is significant because it is up-to-date and provides policymakers with information about the connections between corporate governance structures and audit quality in emerging nations. The fact that it offers insights to managers, researchers, lawmakers, and professional accounting organizations makes it important as well. Few empirical studies have been conducted in the past on the impact of corporate governance on audit quality, and those that have been done mostly focus on developed countries. The current study is also one of the few that has looked into the connection between corporate governance and audit quality in the context of Jordan.