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Identative Relationship Between Board Independence And Audit Remissions

Decent Essays
Firstly, the proportion of non-executive directors would be a significance independent variable from this research. Zhang and Yu (2016) indicates that independent directors means that there is no material connection among directors and companies, shareholder and officer of a related company. According to their research, it can be illustrated that if the firm is operating within a lower information environment, the connection between board independence and audit fees would be significantly. On the contrary, when the information environment is strong, there will be a positive relationship between the board independence and external audit fees (Zhang and Yu, 2016). Nevertheless, Moradi et al (2012) had received a significant and negative…show more content…
In order to test and receive a more precise connection between the corporate governance and audit fees, to explore the authentic relations between the independent of directors and external fees is necessarily. Therefore, the first hypothesis would be:
H1: The greater the proportion of non-executive director, the more audit fees that needed to fulfil the need of the non-executive board director.
2.3.2 The influence of the amount of remuneration of board director on audit fees
Secondly, the amount of remuneration of board director is also a significant factor that can influence the external fees. Goh and Gupta (2016) illustrate that there is a negative relationship between director remuneration and monitoring characteristics, such as director independence, they found that the more efficiency the top management, the less remuneration the company need to pay. Therefore, the amount of remuneration has a significant effect on the corporate governance, which would subsequently influence the association between corporate governance and external audit fees. After study the empirical relation between audit fees and governance mechanisms in Germany, Voeller et al (2013) find that performance-based management remuneration has a significant and positive impact on audit fees. According
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