Mediating Effect of Quality-Differentiated Auditor on the Relationship between Managerial Ownership and Monitoring Mechanisms


  • Rachael Oluyemisi Arowolo Chrisland University, Ajebo, Ogun State, Nigeria
  • Ayoib Che Ahmad Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia
  • Oluwatoyin Muse Johnson Popoola Tunku Puteri Intan Safinaz School of Accountancy, Universiti Utara Malaysia
  • Hisar Pangaribuan Adventist University of Indonesia, Indonesia


Agency Problem, Audit Market, Managerial Ownership, Monitoring Mechanisms, Quality-Differentiated Auditors


Over the past decade, most studies in corporate governance and audit market have emphasised the importance of monitoring mechanisms (MM), especially after the global economic meltdown resulting from the Enron saga. The literature on MM continues growing as many countries especially the Sub-Saharan Africa are still struggling to come out of the effect of the economic meltdown and businesses continues to fail or merge. This paper, therefore, examines the relationship between Managerial Ownership (MO) and MMs with quality-differentiated auditors (QDA) as the channel for the relationship. The study used data from non-financial listed companies in Nigeria providing empirical supports that MO significantly associates with MMs in the right direction. Likewise, QDA also influences the MMs in the right direction suggesting that QDA is necessarily required to enhance adequate MMs. The findings of this study provide support for the association of MO and MMs with the intervention of QDA for solutions to agency problems. Companies should, therefore, motivate the management to own shares within the reasonable range that aligns the interest of the management with that of the shareholders. This paper adds to knowledge especially in Nigeria and Sub-Saharan Africa by examining a mediating effect to depict the relationship between MO and MM, which are not evident in prior studies.


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How to Cite

Arowolo, R. O., Che Ahmad, A., Popoola, O. M. J., & Pangaribuan, H. (2018). Mediating Effect of Quality-Differentiated Auditor on the Relationship between Managerial Ownership and Monitoring Mechanisms. Indian-Pacific Journal of Accounting and Finance, 2(2), 65-77. Retrieved from



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