Voluntary audits: An empirical study.

Abstract

This study examines 380 incorporated societies in New Zealand. It investigates the demand for audits in a modern voluntary audit setting, in which a number of levels of auditor qualification and reputation can be chosen. Where audits are not compulsory, a substantial number of organisations do choose to appoint auditors. Voluntary audits of all types are associated with larger organisational size. The results of this study support the audit as a form of monitoring and bonding, contracting, signalling and organisational control; they do not support the insurance explanation for auditing in a voluntary setting.