Insider trading and audit effort: does ownership concentration and tax havens matter?

Purpose This research aims to examine the impact of insider trading on audit effort. It also aims to investigate the moderating influence of tax havens and ownership concentration on the relationship between insider trading and audit effort. Design/methodology/approach The authors relied on secondary data from Australian nonfinancial firms. The final sample consisted of 2,303 observations spanning the period from 2011 to 2022. Findings The authors found that insider trading has a significant and positive relationship with audit effort. Furthermore, the findings revealed that tax havens and ownership concentration moderate the relationship between insider trading and audit effort. Originality/value The results contribute to the literature by highlighting the determinants of the insider trading–audit effort relationship. Furthermore, this study has practical implications for shareholders, companies, auditors and regulators.