ABSTRACT This study investigates auditor choice in microfinance institutions (MFIs) across emerging markets, focusing on ownership structure, governance and international exposure. Using a unique hand‐collected global dataset, we compare member‐owned and non‐member‐owned MFIs and document that member‐owned MFIs are significantly less likely to engage international auditors. This effect persists after controlling international exposure but is moderated by the quality of formal institutions and the presence of internal audit functions. Our findings advance the literature on auditor selection by highlighting how organizational ownership interacts with institutional quality in shaping auditor choice. These results have important implications for regulators and policymakers seeking to strengthen governance and enhance audit quality in the microfinance sector.
Mwintome et al. (Wed,) studied this question.