Fawad Ahmad

Citation

Thesis Title
The Impact of Corporate Political Connections and Political Instability on Audit Fees and Earnings Quality in Pakistan

Read article at Massey Research Online:

Prior literature suggests corporations form ties with politicians to obtain political favour (political rents). Politicians also depend on corporations to secure campaign contributions and create jobs for their allies (political costs). Whether the political costs are higher or lower than the rents is an empirical question. Mr Ahmad attempted to examine this empirical question by segregating politically connected firms into two groups, companies connected to civilians (politicians) and military connected companies in Pakistan. The results indicated that civil connected companies pay higher audit fees and report poor earnings quality suggesting higher political costs. Whereas, military connected companies pay lower audit fees and report better earnings quality implying higher political rents. Mr Ahmad also examined the impact of political instability and found that political instability has a positive association with audit fees and a significant negative association with earnings quality.

Supervisors
Professor Michael Bradbury
Professor Ahsan Habib