How African Firms Choose Their Auditors: Evidence from Organisational Complexity and Ownership Structures in Cameroon

Abstract

This study examines how firm-level characteristics influence external auditor choice among companies operating in Cameroon. Using survey data from 300 non-financial firms located in Douala, Yaounde, and Buea, the analysis focuses on organisational complexity, ownership structure, and selected financial characteristics. Audit choice is considered through three configurations: engagement of a Big 4 auditor, adoption of joint audits, and the use of two Big 4 audit firms. Binary logistic regression results show that organisational complexity, captured by sectoral diversification and geographical dispersion, significantly increases the likelihood of selecting higher-quality audit arrangements, particularly joint audits and dual Big 4 engagements. Conversely, institutional ownership is consistently associated with a lower propensity to engage high-quality auditors, suggesting a substitution effect between internal ownership-based monitoring and external audit assurance within the Cameroonian context. Financial characteristics, including leverage and disclosure costs, exhibit conditional effects that vary across audit configurations. By providing firm-level evidence from a developing African economy, this study contributes to the corporate governance literature by highlighting how institutional constraints, ownership power, and organisational structure jointly shape audit choice. The findings offer relevant insights for managers, regulators, and policymakers seeking to enhance audit quality and financial transparency in African markets.