Determinants of external auditor selection and firm performance from a commercial bank manager’s perspective: Evidence from Vietnam

  • Received October 24, 2022;
    Accepted February 1, 2023;
    Published February 10, 2023
  • Author(s)
  • DOI
    http://dx.doi.org/10.21511/bbs.18(1).2023.05
  • Article Info
    Volume 18 2023, Issue #1, pp. 53-67
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Financial statements of Vietnamese commercial banks must be audited annually by an auditing firm according to the Government’s regulations. This study identifies factors associated with firm performance and external audit selection. The decision to choose an auditing firm is considered an intermediate variable to determine the degree of impact of some factors on the performance of commercial banks. This study was conducted by interviewing 265 managers holding high positions as CEOs and CFOs at 30 commercial banks in Vietnam. The non-probability sampling method was applied. The survey was produced using Google Forms and sent directly to participants. Structural Equation Modeling (SEM) is applied to test hypotheses. The results show that except for the complexity of a firm, the factors such as legal environment, audit fees, audit firm size and reputation, bank governance, audit experience, and relationship positively impact external auditor selection. Besides, external auditor selection significantly affects firm performance. This study’s conclusions from the viewpoints of bank managers open the door to promising and timely future research. It is necessary to deepen and broaden academic understanding of the ideas and determining elements influencing external auditor selection and firm performance. More research is needed to fully comprehend this problem and move towards a policy solution.

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    • Figure 1. Conceptual research model for commercial banks in Vietnam
    • Table 1. General information of the research data sample
    • Table 2. Dimensions and scales
    • Table 3. Reliability and validity statistics
    • Table 4. Discriminant reliability
    • Table 5. Structural equation modeling analysis results
    • Table 6. Summary of effect decomposition
    • Conceptualization
      Hau Nguyen Van, Hai Phan Thanh, Giang Ha Hai
    • Data curation
      Hau Nguyen Van, Hai Phan Thanh, Giang Ha Hai
    • Formal Analysis
      Hau Nguyen Van, Hai Phan Thanh, Giang Ha Hai
    • Investigation
      Hau Nguyen Van, Hai Phan Thanh, Giang Ha Hai
    • Methodology
      Hau Nguyen Van, Hai Phan Thanh, Giang Ha Hai
    • Project administration
      Hau Nguyen Van, Hai Phan Thanh
    • Resources
      Hau Nguyen Van, Hai Phan Thanh, Giang Ha Hai
    • Supervision
      Hau Nguyen Van, Giang Ha Hai
    • Validation
      Hau Nguyen Van, Giang Ha Hai
    • Writing – original draft
      Hau Nguyen Van, Hai Phan Thanh, Giang Ha Hai
    • Writing – review & editing
      Hau Nguyen Van, Hai Phan Thanh, Giang Ha Hai
    • Software
      Hai Phan Thanh
    • Visualization
      Giang Ha Hai