The aim of this study is to examine the impact of corporate governance mechanisms
on audit quality in Palestine. The sample included of 46 companies listed on the
Palestine Exchange for the period (2013-2015). Relevant data were collected from the
PEX website and from the annual reports of the sampled companies. Audit quality
was assessed using audit firm size( Big 4 or non-Big 4). To achieve the objectives of
the study, binary logistic regression was used. Results of the analysis revealed that
companies with a high percentages of ownership concentration tend to hire a high
quality auditor (Big4 auditing firm), and indicated a significant positive relationship
between board size and existence of audit committee and audit quality. In addition,
results showed a significant positive relationship between total asset and financial
leverage and audit quality. Furthermore, director ownership, board independence,
CEO duality were found to have no effect on audit quality.
Based on the results of the study, the study recommends that regulators need to
encourage companies for more compliance with corporate governance instructions.