Examining the Relationship of CEO Compensation, Duality of Managing Director, and Weakness of Internal Organizational Controls with Audit Fee

International Journal of Organizational Leadership 7(2018)153-161

9 Pages Posted: 8 Mar 2019

See all articles by Ali Reza Ahmadi Simab

Ali Reza Ahmadi Simab

affiliation not provided to SSRN

Amir Shams Koloukhi

Islamic Azad University - Young Researchers and Elites Club

Date Written: 2018

Abstract

This study aims to examine the effect of CEO compensation, duality of managing director, and quality of internal organizational controls on audit fee. Audit fee is the written fee in the related financial statements; CEO compensation is extracted from the decisions in the public meeting session. Duality of managing director is simultaneous attribution of chief or vice presidency of CEO to one person obtained from CEO reports. To measure internal controls´ quality, reference of the auditor in his report to the significant internal control weaknesses was the basis. Using systematic random sampling, 91 firms listed in Tehran Stock Exchange from 2013-2015 were selected. For hypothesis test, panel regression model and Hausman test were used to select from combined models, fixed and random effects. Results showed a positive and significant correlation between natural logarithm of CEO compensation and audit fee. There was no significant correlation between duality of managing director, weakness of internal controls, and audit fee.

Suggested Citation

Ahmadi Simab, Ali Reza and Shams Koloukhi, Amir, Examining the Relationship of CEO Compensation, Duality of Managing Director, and Weakness of Internal Organizational Controls with Audit Fee (2018). International Journal of Organizational Leadership 7(2018)153-161 , Available at SSRN: https://ssrn.com/abstract=3336641

Ali Reza Ahmadi Simab

affiliation not provided to SSRN

Amir Shams Koloukhi (Contact Author)

Islamic Azad University - Young Researchers and Elites Club ( email )

Torbat-e-Jam Branch
Torbat-e-Jam
Iran

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