Abstract
The objective of this study is to offer detailed and updated overview of the factors perceived by the audit
committee members to select external auditors. Moreover, the study aims to explore that what are the main
determinants perceived by the clients from their external auditors. Qualitative research design is used, and
open-ended interviews has been conducted to explore the phenomena under investigation. The contextual
setting of the study is provided by financial firms listed on Pakistan stock exchange (PSX-100). The study
finds that management continues to provide input into the selection decision of external auditors because
the audit committees view management as an important information source. Audit committee seeks input
from management to assess the external audit accessibility, reputation, firm’s industry knowledge and
technical expertise. The result of the study suggests that more regulations are required to liable the audit
committees for selecting external audit firm. The management input raises the audit risk and mitigate the
audit independence. The findings remain robust for audit firms and companies looking for an independent
and transparent relationship. Also, the study has implications to build transparent financial disclosure
practices.
MUHAMMAD NAVEED, Dr. ALIA QADIR, MUHAMMAD UMER. (2020) Determinants of Audit Firm Selection Decision: A Qualitative Study of Firms Listed on Pakistani Stock Exchange (PSX), International Review of Management and Business Research, Volume 9, Issue 4 .
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