The Influence of the CEO on Auditor Choice in Private Firms: An Interplay of Willingness and Ability

Reliable financial reporting is highly important when aiming for sustainable development and the long-term stability of entire economy. An external audit one main monitoring mechanisms to warrant this reliability. While auditing serves as an independent mechanism towards management, studies indicate that management often driving force behind auditor appointments terminations, especially if it willing drive choice. raises questions about auditor’s independence resulting quality, willingness will only have impact also able exert its will. This study, therefore, examines what extent ability strengthens CEO’s appoint a non-Big Four auditor. Using dataset 316 private firms, regression results show CEO has sufficient power, less likely Big actually appointed, at least control effectiveness board weak such can his/her power. emphasizes need both shareholders legislators ensure guaranteed implement complementary like strong board.