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Our study finds that relative to firms managed by local CEOs, firms managed by CEOs who have returned from overseas (returnee CEOs) exhibit significantly higher audit fees. We also find this positive association to be stronger for returnee CEOs who manage firms with greater agency problems, have overseas experience in countries with better developed institutions, or have greater business knowledge. Further analyses indicate that firms managed by returnee CEOs tend to exhibit better financial reporting quality, lower propensities for financial fraud, and fewer earnings restatements in subsequent years. In addition, firms managed by returnee CEOs are associated with greater internationalization and higher propensities for seasoned equity offerings (SEOs) than firms managed by local CEOs. Overall, our findings are most consistent with the conjecture that returnees tend to bring ethics and practices that ensure higher financial reporting quality back to their home countries. Our findings offer a plausible explanation that returnee talents could increase firm value. [ABSTRACT FROM AUTHOR]

This study uses a large sample of firms from 35 countries to examine how media coverage of corporate social irresponsibility (CSI) affects audit fees. We document a positive and significant relationship between media coverage of CSI and audit fees. Further evidence indicates that this positive relationship is less pronounced for firms with a higher level of commitment to corporate social responsibility (CSR) performance but is more pronounced for firms domiciled in countries with stronger investor protections, higher regulatory quality and higher CSR disclosure requirements. Taken together, these findings support the conjecture that CSI media coverage increases auditors' risk and thereby increases audit fees. Moreover, our findings suggest that the effect of media coverage of CSI on audit fees varies with country‐level institutional characteristics and the degree of firms' substantive commitment to CSR performance. [ABSTRACT FROM AUTHOR]

In this study, using a large sample of firms from 27 countries around the world, we examine the relationship between disaggregated earnings forecasts and audit fees. We find that the positive association between management earnings forecasts and audit fees in prior studies is primarily driven by firms issuing management forecasts that contain disaggregated performance measures. We further find that better developed country‐level institutions can weaken the positive relation between disaggregated earnings forecasts and audit fees. Taken together, our findings support the important role of disaggregated earnings forecasts in signalling the credibility of prospective financial information provided by firms and shed light on the debate over the positive association between management earnings forecasts and audit fees. [ABSTRACT FROM AUTHOR]

SYNOPSIS: This paper examines whether news coverage of client firms is associated with their audit fees. Using data from China listed firms during 2004–2013, we find that high coverage client firms are on average charged higher audit fees, irrespective of the media tone. This positive association is stronger for large auditors than for small auditors, and for bad news than for good news. The main results hold for both state-owned enterprises (SOEs) and non-SOEs, and for both politically connected and non-connected firms. The results are robust after controlling for the effects of information asymmetry, auditor choice, internal corporate governance, and alternative measurements of the key variables. Overall, our evidence is supportive of the view that auditors assess high coverage clients as higher risk audits requiring greater audit efforts. We conclude that the financial news media plays a disciplining role in China through its potential to trigger reputational sanctions and regulatory action. [ABSTRACT FROM AUTHOR]