Factors influencing auditor change: evidence from Malaysia

Document Type

Journal Article


Faculty of Business and Law


School of Accounting, Finance and Economics / Finance, Economics, Markets and Accounting Research Centre




Nazri, S., Smith, G. M., & Ismail, Z. (2012). Factors influencing auditor change: evidence from Malaysia. Asian Review of Accounting, 20(3), 222-240. Available here


Purpose - The purpose of this paper is to examine two factors which influence auditor change: audit and client firms' characteristics, for Malaysian listed companies. Given the costs involved, it is important to understand the reasons why companies change their auditor and choose a particular level of audit assurance. Design/methodology/approach - This study evaluates the effects of various independent variables on auditor change behaviour and the sensitivity of results to alternative period measurement by using logistic regression analysis. Findings - An examination of 400 companies listed on the Bursa Malaysia (formerly known as Kuala Lumpur Stock Exchange-KLSE) over a period of 18 years reveals auditor change to be significantly influenced by client firm's characteristics, notably changes in management, size of the client firm, complexity, and client's firm growth, lending support to the findings of previous survey studies. Research limitations/implications - In the cause of brevity, a number of potentially important variables, that might enhance an understanding of auditor change behaviour in Malaysia, were not incorporated in the regression models, and might be considered in future studies. Originality/value - The results presented in the paper have important implications for both the auditing profession and regulators in Malaysia.