Purpose – The purpose of this paper is to investigate the association between corporate ownership
structures and audit fees paid to external auditors by Malaysian companies listed on Bursa Malaysia.
This study focusses on the extent of the auditor’s reliance on the client’s internal control inasmuch as
the corporate ownership structures are varied, and, ultimately, affect the audit fees.
Design/methodology/approach – This study applies the agency theory in formulating three
hypotheses that guide the results analysis. By employing a multi regression model for a sample of
۳۴۵ Malaysian companies listed on Bursa Malaysia, this study examines the relationship of ownership
structure, namely, managerial ownership, foreign ownership and government ownership with audit
fees using data for 2010.
Findings – The results show a significant positive relationship between audit fees and firms with
larger foreign ownership and government ownership but no significant relationship with firms with
higher managerial ownership. This study contributes recent evidence concerning the relationship
between corporate ownership structure and audit fees.
Practical implications – Regulators may consider ownership structure on the standards or
regulation setting in order to be practical and operationalized in line with the impact associated with
different ownership structures. The practitioners may also design appropriate methodologies and
procedures for the different ownership structures for high-quality service and to standardize the risk
Social implications – The ownership structures have different influences on the audit fees, as well as
complexity of the firms and their profitability.
Originality/value – The study looks upon certain percentages of ownership structures, and how they
affects audit fees, firms complexity and profitability.
Keywords Ownership structure, Audit fees, Foreign ownership, Managerial ownership,
Paper type Research paper