The data subject to analysis in this study comprised 53 private (family controlled)
companies operating in Australia. The data were drawn from a database of 318 family businesses compiled through survey by the National Mutual Family Business Research Unit. A company was classified as a family business when a majority of the members of the board of directors were identified as members of the same family. From the database of 318 family businesses. 155 businesses indicated that they employed the services of an external auditor. A further 102 observations were deleted either because firms indicated the existence of a regulatory requirement to audit (25) or due to missing values relating to one or more of the data items used in the analysis (77). The high rate of missing values is attributed to respondent concerns about disclosure of confidential information and the complexity of some of the questions (e.g., debt to equity ratio). Finally, 53 observations remained for analysis.