The Impact of Agency Cost on Demand for Non-Audit Services for Listed Corporations in Jordan

Abstract

This study investigates whether agency cost affects companies' demand for non-audit services (NAS). To achieve this objective, the data is collected from the financial statements of a sample consisting of 122 manufacturing and service corporations listed in the Amman Stock Exchange (ASE) for the year 2010. The results showed that both size of the company and leverage impact the demand for NAS and that there is no impact from block holders' ownership, size of audit firm, performance of the company, and sector. With this, the results indicated that there is no impact from agency cost on the demand of NAS. Finally, the study recommends future studies to incorporate corporate governance variables to examine the effect of agency cost on non-audit services.