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Factors Influencing Voluntary Audit among Small and Medium Enterprises: The Malaysian Evidence

Author

Listed:
  • Erlane K Ghani
  • Syakir Munir Ismail Munir
  • Zuraidah Mohd Zam
  • Citra Sukmadillaga

Abstract

In Malaysia, the Small and Medium Enterprises (SMEs) are encouraged to get their financial statements audited although such practice is on a voluntary basis. This study examined the voluntary practices of the SMEs in getting their financial statements audited. Specifically, this study examined the factors influencing the voluntary audit among the SMES. Three factors were chosen namely, improved quality of financial statements, managerial ownership and managers’ perception towards voluntary audit. Using a questionnaire as the research instrument on 70 SMEs, the results showed that managerial ownership and managers’ perception towards voluntary audit influence the SMEs to get their financial statements audited. However, the results showed that there is a negative relationship of the improvement quality of financial statements towards voluntary audits among the SMEs. The findings provide further understanding on the SMEs’ action in willingness to adopt one practice. In addition, this study also provides valuable information to the Malaysian regulatory and professional accounting bodies in their debates on providing audit exemption for the SMEs in Malaysia.

Suggested Citation

  • Erlane K Ghani & Syakir Munir Ismail Munir & Zuraidah Mohd Zam & Citra Sukmadillaga, 2020. "Factors Influencing Voluntary Audit among Small and Medium Enterprises: The Malaysian Evidence," Humanities and Social Sciences Letters, Conscientia Beam, vol. 8(1), pages 23-35.
    • Handle: RePEc:pkp:hassle:v:8:y:2020:i:1:p:23-35:id:837
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