Thesis (MBA)--Stellenbosch University, 2001 / ENGLISH ABSTRACT: This focus of this study is to analyse trends between three different performance variables for all listed industrials on the Johannesburg Stock Exchange. The three variables are earnings per share, headline earnings per share and operating cash flow per share. Sample A represents data from 1974 to 1999, and Sample B from 1990 to 1999. There are many companies that still do not report headline earnings per share in their financial reports as at the end of their financial year for 1999. A list of these companies is attached as Appendix A. A total of 21 different combinations of the variables were tested for correlations. From this investigation three significant relationships were noted. Firstly, there is a high correlation between earnings per share and operating cash flow per share. The pooled result from 1974 to 1999 is 0,636, that confirms a positive relationship between the two variables. Secondly, the result of the same two variables from the Sample B dataset also shows a high correlation of 0,601 (pooled result). Thirdly, there is a very strong negative pooled result of -0,897 when analysing the difference between (EPS-HEPS) and (HEPS-CFPS). An interesting observation was that although individual yearly results were showing high correlations, the pooled results did not reflect the same tendency. Validated findings attained through statistical testing in this study will in future allow analysts to predict the behaviour of one variable based on the performance of another variable. / AFRIKAANSE OPSOMMING: Die fokus van hierdie studie is om tendense tussen drie verskillende prestasieveranderlikes vir alle genoteerde nywerheidsaandele op die Johannesburgse Effektebeurs te ontleed. Die drie veranderlikes is verdienste per aandeel (VPA), wesensverdienste per aandeel (WVPA) en kontantvloei uit bedryfsaktiwiteite per aandeel (KBAPA). Steekproef A verteenwoordig data vanaf 1974 tot 1999 en Steekproef B vanaf 1990 tot 1999. Teen die einde van 1999 was daar steeds maatskappye wat nie die wesensverdienste per aandeel in hulle finansiële verslae rapporteer nie. 'n Lys van hierdie maatskappye is aangeheg as "Bylae A". In totaal is 21 verskillende kombinasies van die veranderlikes getoets vir onderlinge afhanklikheid. Die ondersoek het drie betekenisvolle verhoudings gelewer. Eerstens is daar 'n hoë onderlinge afhanklikheid tussen verdienste per aandeel en kontantvloei uit bedryfsaktiwiteite per aandeel. Die saamgevoegde resultate vanaf 1974 tot 1999 is 0,636, wat 'n positiewe verhouding tussen die twee veranderlikes bevestig. Tweedens toon die resultate van dieselfde twee veranderlikes van Steekproef B se datastel ook 'n hoë onderlinge afhanklikheid van 0,601 (saamgevoegde restultate). Derdens is daar 'n baie sterk negatiewe resultaat van -0,897 wanneer die verskil tussen (VPA-WVPA) en (WVPA-KBAPA) ontleed word. 'n Interessante waarneming was dat, alhoewel individuele jaarlikse resultate hoë onderlinge afhanklikheid getoon het, die saamgevoegde resultate nie dieselfde neiging weerspieël het nie. Geldige bevindinge, verkry deur statistiese proefneming in hierdie studie, sal analiste in die toekoms toelaat om die gedrag van een veranderlike te voorspel gebaseer op die prestasie van 'n ander veranderlike.

Thesis (MBA)--Stellenbosch University, 2001. / ENGLISH ABSTRACT: The objective of this study is to determine the optimum number of shares to be included in a well-diversified portfolio of small-capitalised companies listed on the Johannesburg Securities Exchange. A previous study by Jordan (1998) on South African companies falling in this category found that at least 20 shares should be included in a well-diversified portfolio. Neu-ner and Firer (1997) conducted a similar study of naïve diversification on all shares listed on the JSE with findings that at least thirty shares should be included in a well-diversified portfolio, which concurred with the findings of the study done by Statman (1997) on the NYSE. Findings of numerous studies conducted in the USA yielded different results with suggestions that between eight and twenty random selected stocks make a welldiversified portfolio. Fama and French (1992) conducted a research on risk and return with findings that size of a company is a better proxy for risk than beta. Small companies tend to produce returns that are greater than the returns from portfolios of larger companies. The research for determining the number of shares to be included in a portfolio of small company shares was conducted using naïve or random diversification and efficient diversification based on Markowitz efficient frontier. The results of the study indicate that random diversification of a portfolio in small company shares requires between twenty and thirty shares for a portfolio to be well diversified. The findings also showed consistency for the different investment periods investigated in terms of risk reduction. The research findings concur with the studies done by Statman, and Neu-ner and Firer, which suggest that a well-diversified portfolio should contain approximately thirty shares. The efficient diversification or Markowitz diversification resulted in fewer shares included in a well-diversified portfolio. However the optimum portfolio depends on the investors' preference as to the trade-off between risk and return. Efficient diversification is primarily based on the degree of covariance between asset returns in a portfolio. The results found using this technique indicate that a well-diversified portfolio should have approximately sixteen shares. The CAPM TUTOR programme used for efficient diversification conducted the research on an ex ante basis. / AFRIKAANSE OPSOMMING: Die doel van hierdie studie is om die optimale getal aandele van 'n goed gediversifiseerde portefeulje wat saamgestel is uit klein gekapitaliseerde maatskappye wat op die Johannesburgse Effektebeurs noteer is, te bepaal. 'n Vorige studie deur (Jordan, 1998) van Suid-Afrikaanse maatskappye wat in hierdie kategorie val, het bevind dat ten minste 20 aandele ingesluit behoort te word in 'n goed gediversifiseerde portefeulje. Neu-ner en Firer (1997) het 'n soortgelyke studie onderneem van naïewe diversifikasie van al die aandele wat op die Johannesburgse Effektebeurs noteer is. Hulle het bevind dat ten minste 30 aandele ingesluit behoort te word in 'n goed gediversifiseerde portefeulje, wat ooreenstem met die bevindings van die studie deur Statman (1997) oor die New Yorkse Effektebeurs. Bevindings van talle studies wat in die VSA gedoen is, het verskillende resultate opgelewer en dui daarop dat tussen agt en 20 lukraak geselekteerde aandele 'n goed gediversifiseerde portefeulje verteenwoordig. Fama en French (1992) het navorsing gedoen oor risiko en opbrengs, en het bevind dat die grootte van 'n maatskappy 'n beter aanduiding vir risiko is as beta. Klein maatskappye neig om opbrengste te lewer wat groter is as die opbrengs van portefeuljes wat bestaan uit groter maatskappye. Navorsing om die getal aandele te bepaal wat ingesluit behoort te word in 'n portefeulje wat bestaan uit aandele van klein maatskappye, is gedoen deur gebruik te maak van naïewe of lukrake diversifikasie en doeltreffende diversifikasie, gebaseer op die Markowitz doeltreffendheidsfront. Die resultate van hierdie studie dui aan dat lukrake diversifikasie, van 'n portefeulje wat uit aandele van klein maatskappye bestaan, tussen 20 en 30 aandele vereis vir die portefeulje om goed gediversifiseerd te wees. Hierdie bevindings het ook gedui op konsekwentheid vir die verskillende beleggingsperiodes wat ondersoek is in terme van risikoverlaging. Hierdie navorsingsbevindings stem ooreen met die studies van Statman, Neu-ner en Firer, wat daarop dui dat 'n goed gediversifiseerde portefeulje uit ongeveer 30 aandele behoort te bestaan. Die doeltreffende diversifikasie, of Markowitz diversifikasie, het tot gevolg gehad dat minder aandele ingesluit is in 'n goed gediversifiseerde portefeulje. Die optimale portefeulje word egter bepaal deur beleggersvoorkeur ten opsigte van die verrekening tussen risiko en opbrengs. Doeltreffende divesifikasie is hoofsaaklik gebaseer op die mate van kovariansie tussen bate-opbrengs in 'n portefeulje. Die resultate dui daarop dat deur hierdie tegniek te gebruik, 'n goed gediversifiseerde portefeulje ongeveer 16 aandele moet insluit. Die CAPM TUTOR-program wat gebruik is vir doeltreffende diversifikasie, het die navorsing op 'n ex ante (vooruitgeskatte ) basis gedoen.

Thesis (MBA)--Stellenbosch University, 2001. / A database on South African industrial companies listed on the Johannesburg Stock Exchange called FIN01 was created by the Graduate School of Business (USB), University of Stellenbosch, to capture the various companies' financial data from 1970 to date. FIN01 database is being updated to capture financial data of listed companies from other African countries. Against the background, the purpose of the study project was to update the University database (FIN01) by creating a database for listed Botswana Stock Exchange companies. The creation of the database required gathering and analysis of information of the various Botswana companies. Before the information from the Annual Reports could be captured into the main database, it was captured into Excel created spreadsheets. This information was captured under the respective workbooks as created for the cash flow statements, income statements and balance sheet items. To conform to the requirements of the FIN 01 database, the Botswana companies were allocated codes. The summarised data was then transferred to the main USB database (FIN01). A thorough analysis on performance of the various companies was then carried out. This was done through trend analysis, common size analysis and ratio analysis. Problems were encountered during the process of data capturing and analysis. These included unavailability of Annual Reports, various different reporting formats and the standard Excel spreadsheets provided. The various companies' inconsistency in reporting was further reflected in the non-reporting of turnover and share prices by most of the listed companies. However, the creation and incorporation of the listed Botswana companies was a success. It is recommended that the project be continued as an ongoing process. The information should be updated on a yearly basis. Companies should be encouraged to continue sending the Annual Reports to the University. The companies should in return get regular feedback on key performance indicators as reflected in the database.

Creditworthiness is a quality that is important to all stakeholders of an organisation, especially bondholders. It is posited that good corporate governance practices assist the confidence that stakeholders have in an organization’s ability to generate the strong cash flows that are needed to meet financial obligations, which in turn should enhance credit risk assessments. Much research has been conducted into rating assessments, but these have largely been directed at developed markets and they have not generally been focused on the impact of good corporate governance practices and procedures. The primary focus of this research is to address this issue through an investigation into the impact of key factors upon the credit risk assessments of listed companies on the Amman Stock Exchange (ASE) in Jordan, as assessed by World'vest Base Inc. (WVB) credit risk assessment scores for Jordanian companies between 2005 and 2007 inclusively. Drawing upon insights from agency (including management disciplining and wealth redistribution hypotheses), stewardship, stakeholder, signalling, legitimacy and the diffusion of innovation theories, this thesis investigates the determinants of WVB credit risk assessments of Jordanian firms under five headings: accounting and financial aspects, market and regulatory perspectives, influence of ownership structure, financial transparency/disclosure and corporate governance factors. To achieve this, an array of modelling techniques is used in order to provide a more comprehensive picture. They include bivariate analysis, one-way analysis of variance, ordinary least square regressions for numerical scores, binary logistic regressions, and ordinal logistic regression. The results demonstrate that accounting and financial factors have a significant impact on credit risk assessments but not capital intensity. Profitability is positively associated with credit risk assessments, while leverage and loss propensity have a negative association. With respect to market and regulatory factors, size and Tobin’s Q are positively associated with credit risk assessments. By contrast type of sector and audit are not related to credit risk assessments. Foreign ownership enhances ratings, whilst institutional ownership has a negative impact. Also, insider ownership and family ownership have some importance. It was surprising to find that whilst financial transparency and disclosure variables are significantly associated positively with credit risk assessments in some models, they were generally not significant across other models. Nevertheless, the study finds empirical evidence to support a degree of association between credit risk assessments and corporate governance factors. There is also a positive association between board size and credit risk assessments, but the most important aspect of corporate governance for Jordanian firms is board expertise. The originality of this thesis also embraces the inclusion not only of externally published WVB risk assessments in the Jordanian context, but also internal numerical ratings that were made available with kind permission from the WVB agency for the purposes of this research. The question is whether there are insights that can be gained from such internal ratings that have not hitherto been made available to other researchers. The answer is in the affirmative, for role duality on the board of directors is evidently more important to WVB’s own internal numerical rating assessments than is evidenced by the WVB externally published credit risk assessments. Specifically, the significance of corporate governance (role duality) is missed by multivariate models that are based solely on externally published data. Furthermore, financial transparency and disclosure variables reveal more (albeit moderate) support for the more refined internal scores of WVB than for the external assessment ratings. Finally, family ownership is also important to WVB’s internal scores. Thus, this research has enabled deeper insights to be gained into credit risk assessment determinants within the Jordanian context.

Thesis (MBA)--University of Stellenbosch, 2011. / The study was undertaken to determine whether companies listed on the Johannesburg Stock Exchange disclose shareholder spread in line with the available statutes such as the JSE Listing Requirements. Further, the study explored the closing balances for group, company, trusts, subsidiaries, and treasuries of all the 50 companies studied to ascertain whether there were differences with the ex WDH share program. Various sources to answering the question were used including the Internet, McGregor BFA, Annual Reports of the companies, and material from University of Stellenbosch Business School (USB). There were varying findings with regards to the study as it was found that some companies had differences in group, company, trusts, subsidiaries, and treasuries. Most of the differences were due to company mistakes, non-consolidation of trusts, and use of different methods. It was found that certain companies tend to omit certain information in disclosing the shareholder spread and this has resulted in many companies with differences in their closing balances for the company, group, trusts, subsidiaries, and treasuries. In addition, it was also discovered that certain companies disclosed major shareholders of less than the prescribed five percent which proved to be very helpful in this study.

Thesis (MBA)--Stellenbosch University, 2003. / ENGLISH ABSTRACT: The study involves an examination of the current situation of the responsibility of companies listed on the Johannesburg Stock Exchange on the disclosure requirements of the accounting standards. In 1995, Statement AC 108 'Inventories' was introduced and it deals with the definition and disclosure of cost of sales. In 1997, Statement AC 306 was introduced and deals with the scope, calculation and disclosure of headline earnings per share (HEPS). The research shows that since the disclosing requirements of Statements 108 and 306 (cost of sales and HEPS) were published, there has been a significant effect on the nature of disclosure of these items by listed South African companies. In addition, income statement items (not yet part of the USB database) were identified and will be loaded onto the USB database of income statements of industrial companies listed on the JSE. These items are: ~ Cost of sales, ~ Gross profit, ~ Gross profit percentage, and ~ HEPS. A large sample of four hundred companies' financial statements over an eleven year period (1990 - 2000) was reviewed, and the data regarding sales, cost of sales, EPS, HEPS, exceptional items, abnormal items and extraordinary items were recorded on a spreadsheet model. Regarding cost of sales, the gross profit and gross profit percentage were calculated, and the arithmetic and weighted means were calculated. The data was analysed against the disclosure requirements and it was found that thirty percent of the companies on the USB's database reports cost of sales as an item on the income statement (without disclosing the item as specified above in "notes to the income statement)". Seventy percent reports cost of sales as a note underoperating profit in the income statement. First in, first out (FIFO) is the method of inventory valuation that is clearly the dominant method used by listed companies in South Africa. An analysis of the HEPS of the listed companies revealed a similar trend and the majority of companies disclosing HEPS do so as per the requirements set out in Statement AC 306. / AFRIKAANSE OPSOMMING: Hierdie studie behels 'n ondersoek na die huidige situasie van maatskappye wat genoteer is op die Johanneburg Effektebeurs se verantwoordelikheid ten opsigte van bekendmaking van rekeningkundige standaarde. Gedurende 1995 is Standpunt RE 108 gepubliseer en dit handel oor die defineëring en openbaarmaking van koste van verkope. Gedurende 1997, is Standpunt RE 306 bekendgestel en handel oor die omvang, berekening en bekendmaking van wesensverdienste per aandeel. Die navorsing toon dat sedert Standpunte 108 en 306 (koste van verkope en wesensverdienste per aandeel) gepubliseer is, daar 'n aansienlike effek op die aard van bekendmaking van hierdie items deur genoteerde Suid Afrikaanse maatskappye is. Verder is inkomstestaat items (wat nog nie deel van die USB databasis is nie) geidentifiseer en sal op die USB databasis van inkomstestate van industriële maatskappye genoteer op JEB geplaas word. Hierdie items is: ~ Koste van verkope, ~ Bruto wins, ~ Bruto wins persentasie, en ~ Wesensverdienste per aandeel. 'n Groot steekproef van 400 maatskappye se finansiële state oor 'n 11 jaar tydperk (1990 - 2000) is nagegaan, en die inligting aangaande verkope, koste van verkope, verdienste per aandeel, wesensverdienste per aandeel, abnormale en uitsonderlike items is opgeneem in 'n sigblad model. Wat die koste van verkope betref, is die bruto wins en bruto wins persentasie bereken, en die gewone sowel as die geweegde gemiddeldes is bereken. Die data is geanaliseer teen die bekendmaking vereistes en daar is gevind dat ongeveer dertig persent van die maatskappye op die USB se databasis rapporteer koste van verkope as 'n item op die inkomstestaat. Sewentig persent rapporteer koste van verkope as 'n nota onder bedryfswins in die inkomstestaat. Eerste in, eerste uit (EIEU) is duidelik die vooraadwaardasie wat die meeste gebruik word deur genoteerde maatskappye in Suid Afrika. 'n Analise van die wesensverdienste per aandeel van die genoteerde maatskappye dui 'n soortgelyke tendens en die meerderheid van maatskappye wat wesensverdienste per aandeel verklaar, doen so volgens die vereistes soos neergelê in Standpunt RE 306.

Thesis (MBA)--Stellenbosch University, 1998. / ENGLISH ABSTRACT: The study investigated the divergent practice in the presentation of Value-Added Statements (V AS) by industrial companies on the Johannesburg Stock Exchange. A standard statement (for 1997 only), as suggested by the author, was constructed for all 188 companies analysed to eliminate unusual or faulty recording of certain items. Overall, the calculated value added differed from that published by the companies due to the inclusion of certain items which are specific to particular companies. The information compiled during the investigation will also he used to upgrade the database of the University of Stellenbosch Business School. The results of the study suggest that there are indeed some deep-rooted conceptual problems in reporting value added as well as problems associated with the treatment of individual items in the statement. Taxation reporting in the V AS was found to be the major item where inconsistency was prevalent. Of the 188 companies studied, about forty percent included what the author tenned "taxation mistakes" in their VAS. Minority reporting was found to be another significant problem area where companies were very inconsistent in reporting the item. In addition, there were some strange items that the writer came across in the published VAS. [f value added is to be accepted as a useful tool in financial reporting, that is, if it is to gain popularity and usefulness, it must be derived from a consistent model and should be systematically applied. / AFRIKAANSE OPSOMMING: Die studie het die verskillende wyses ondersoek waarop Toegevoegdewaardestate (TWS) opgestel is deue industriele maatskappye op die Johannesburgse Effektebeurs. 'n Standaard staat (slegs vir 1997) soos voorgestel deur die skrywer is opgestel vir elk van die 188 maatskappye wat ontleed is ten einde ongewone of foutiewe rapportering te elimineer. Oor die aigemeen het die berekende toegevoegde waarde verskil van die syfers soos gepubliseer deur die maatskappy. Die verskille was hoofsaaklik toe te skryf aan die insluiting van sekere items wat uniek was aan bepaaJde maatskappye. Die informasie versamel gedurende hierdie ondersoek sal ook gebruik word om die databasis van die Bestuurskool van die Universiteit van Stellenbosch op te gradeer. Die resultate van die studie het getoon dat daar weI sommige diep-geworteide konseptuele probleme in die rapportering van toegevoegde waardc bestaan het sowel as probleme geassosieer met die hantering van individuele items in die TWS. Veertig persent van die 188 maatskappye ondersoek, het belastingfoute (soos deur die skrywer omskryf) ingesluit in die gepubliseerde TWS. Die rapportering van minderheidsbelang was ook 'n groot probleem area wat gelei het tot 'n groot mate van inkonsekwente rapportering. Verder het die skrywer op 'n hele aantal ongewone items in die gepubliseerde TWS gevind. As toegevoegde waarde as 'n handige hulpmiddel in finansiele rapportering aanvaar wil word, dit is om groter populariteit en groter gebruikswaarde te verkry, sal dit ontwikkel moet word uit 'n bepaalde model, en op 'n sistematiese wyse opgestel word.

Thesis (MBA)--Stellenbosch University, 2012. / The study determined whether an investment model on the Johannesburg Stock Exchange (JSE) incorporating risk, simple rules and simulating a realistic environment could yield statistically significant returns. Further, the study assessed the success of individual trades and profitability compared to a buy-and-hold strategy where funds were switched between shares and a riskless asset. JSE data from 1997 to 2011 were studied using popular technical rules and fundamental indicators integrated into a hybrid investment model. Investments on individual shares were simulated over time and results were analysed by profitability of individual trades and the interaction of technical rules and fundamental data. Parameters were identified that outperformed the All Share Index (ALSI) by 18.6% and exposed the investor to lower risk than the ALSI. Other parameters were also identified that earned a return 137% higher than an ALSI buy-and-hold strategy. However, the identification of a single set of parameters that yielded statistically significant returns at a lower risk than the ALSI, met a priori expectations of outperforming the ALSI and outperformed a buy-and-hold strategy was not identified. Areas of future research included expanding on the technical analysis implemented such as introducing stop-loss rules, and adopting a finer-grained approach to the sectors of companies. Areas to detect further patterns of market inefficiencies were also identified.

Thesis (MBA)--Stellenbosch University, 2012. / Ever since listed companies have been allowed to buy back shares (since the Companies Amendment Act was introduced in 1999), a major question has been whether companies with extra cash should pay out dividends or buy back shares. The larger research project for the University of Stellenbosch Business School (USB) will evaluate this question by comparing the rand value of dividends paid to shareholders to the rand value of share buybacks and comparing the rand value of special dividends to the rand value of share buybacks. The research described in this report was conducted as part of the bigger research project on dividends and aimed to produce a provisional list of special dividends paid from 1999 to 2011 for all companies listed on the Johannesburg Stock Exchange. The list comprises only special dividends paid from earnings, hence the term „provisional list‟. The bigger research project to produce a comprehensive list of special dividends will include the following additional steps: 1. Determining payments from earnings and share premium. 2. Determining payments from earnings, share premium and special designated dividends (SDD). 3. Determining payments from earnings, share premium, SDD and statistically evaluated dividends. The present research showed that using databases alone would not yield viable data for research purposes. The researcher started to gather data from two databases and afterwards had to evaluate the Stock Exchange News Service (SENS) announcements to eliminate the discrepancies. Furthermore, the physical financial statements gave valuable information to produce the provisional list. The correct method to determine the true rand amounts for dividends is firstly to consult the annual financial reports and secondly to retrieve the SENS announcements. Then the entry can be verified by multiplying the dividend per share by the number of shares on the record date. This rand value can be found in the financial statements in the statement of changes in equity. The dividends paid out of share premium are easy to identify, as the entry will be specifically stated in the statement of changes in equity. The determination of special dividends is rather difficult, because the rand amount of special dividends are hardly ever published as such in the statement of changes in equity. The conclusion reached by the researcher is that the only method to obtain the correct entries for any financial evaluation is to consult the audited financial statements. Databases can be useful in obtaining some information; however, the only reliable resource to retrieve the final information is from financial statements.

Forskningsproblem: Det har uppmärksammats en ökad oro bland Big 4-byråerna över den tilltagande konkurrensen på revisionsmarknaden och tendensen att bolag väljer att byta revisionsbyrå mer frekvent. Det finns ett behov i att förklara varför bolag väljer att frivilligt byta revisionsbyrå. Syfte: Syftet med studien är att förklara varför bolag frivilligt väljer att byta revisionsbyrå. Metod 15 hypoteser härleds utifrån befintlig forskning och teori inom området för revisionsbyråbyten. Dessa prövas genom en kombinerad enkät- och dokumentstudie av totalt 100 bolag för perioden mellan 2010-2014. Resultat: Av studiens totalt 100 bolag visade det sig att 33 bolag (33 %) bytt revisionsbyrå under perioden mellan 2010-2014. 14 av studiens 15 hypoteser förkastas i hypotesprövningen. Kunskapsbidrag: I den statistiska analysen visas variablerna revisionskostnad, byte av ledning, bristfälligt samarbete och tredje parts påtryckningar bli signifikanta i att förklara ett byte av revisionsbyrå. Endast variabeln bristfälligt samarbete uppvisar dock ett korrekt förutspått samband, där ett ökat bristfälligt samarbete mellan revisor och bolagsledning ökar sannolikheten för ett byte av revisionsbyrå. / Problem: Increased concern regarding an enlarged competition and more frequent audit firm switching behavior has been noticed among the Big 4-audit firms. There is a need to explain why companies voluntarily choose to switch audit firm. Purpose: The aim of the study is to explain why companies voluntarily choose to switch audit firm. Method: 15 hypothesis are derived from existent research and theory in the area of audit firm switching. They are tested through a combined survey- and document study of 100 companies during the period of 2010-2014. Results: The study showed that 33 out of 100 companies (33 %) switched their audit firm during the period of 2010-2014. 14 out of 15 hypothesis are rejected in the study. Contribution: The statistical analysis showed that the variables audit fee, change in management, inadequate working relationship and third party influences are significant in explaining an audit firm switch. However, the only variable to show a correctly predicted relationship is inadequate working relationship, which implicates that an increased inadequate working relationship between the auditor and management leads to an increased probability of an audit firm switch.