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This study investigates the relationship between Confucianism and auditor judgment. Using a sample of Chinese listed firms from 2006 to 2019, we find that the Confucian atmosphere in auditors' hometowns is positively associated with their audit adjustments. The mechanism analyses show that Confucianism in auditors' hometowns can influence auditor morality and further affect their judgment. We also find that the positive relationship between Confucianism in auditors' hometowns and audit adjustments is reinforced by auditor exposure to strong Confucian atmospheres in their places of education and workplaces but weakened by Western culture diffusion. Moreover, auditors who are more influenced by Confucianism are associated with more improvements in client financial reporting quality, more upward and downward adjustments, more small and large adjustments and more audit effort but not higher audit fees. Overall, this study provides evidence that supports the imprinting effect of traditional Confucianism on auditors. [ABSTRACT FROM AUTHOR]

Purpose: While existing research explores the impact of audit market competition on audit fees and audit quality, there is limited investigation into how competition in the audit market influences auditors' writing style. This study examines the relationship between audit market competition and the readability of audit reports in Iran, where competition is particularly intense, especially among private audit firms. Design/methodology/approach: The sample comprises 1,050 firm-year observations in Iran from 2012 to 2018. Readability measures, including the Fog index, Flesch-Reading-Ease (FRE) and Simple Measure of Gobbledygook (SMOG), are employed to assess the readability of auditors' reports. The Herfindahl–Hirschman Index (HHI) is utilized to measure audit market competition, with lower index values indicating higher auditor competition. The concentration measure is multiplied by −1 to obtain the competition measure (AudComp). Alternative readability measures, such as the Flesch–Kincaid (FK) and Automated Readability Index (ARI) are used in additional robustness tests. Data on textual features of audit reports, auditor characteristics and other control variables are manually collected from annual reports of firms listed on the Tehran Stock Exchange (TSE). Findings: The regression analysis results indicate a significant and positive association between audit market competition and audit report readability. Furthermore, a stronger positive and significant association is observed among private audit firms, where competition is more intense compared to state audit firms. These findings remain robust when using alternative readability measures and other sensitivity checks. Additional analysis reveals that the positive effect of competition on audit report readability is more pronounced in situations where the auditor remains unchanged and the audit market size is small. Originality/value: This paper expands the existing literature by examining the impact of audit market competition on audit report readability. It focuses on a unique audit market (Iran), where competition among audit firms is more intense than in developed countries due to the liberalization of the Iranian audit market in 2001 and the establishment of numerous private audit firms. [ABSTRACT FROM AUTHOR]

The present study on the manufacturing and services firms of NSE 500 Index, India, examines the impact of audit committee characteristics and auditor's remuneration on the firm performance as measured by accounting (ROA) and market measure (Tobin's Q and ROE) of firm performance. Audit committee size has a positive impact on firm performance (as measured by Tobin's Q), but it was not observed with ROA and ROE, and, on the other hand, had a negative significant impact on firm performance (as measured by ROA and ROE). Auditor remuneration also had a significant negative impact on overall firm performance. The percentage of grey, independent, and executive directors did not have any significant impact on firm performance overall, implying that although auditors' independence is crucial, as per the Companies Act (2013), it eventually seems to hamper firm performance, as auditors' independence plays a fair role and earnings management practices are reduced to a minimum. Moreover, the auditor's remuneration also has a significant negative impact on firm performance, stating that the auditor's remuneration and, in turn, usually independent auditors are critical in the valuation of the firm, which supports firm performance in the long run. However, non-audit fees did not have any significant impact on firm performance, and audit committee meetings had a positive significant impact on firm performance in the long run. [ABSTRACT FROM AUTHOR]

Copyright of Revista de Contabilidade & Controladoria is the property of Revista de Contabilidade & Controladoria RC & C and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This paper investigates the impact of natural disasters on the pricing of audit services. Using a staggered difference-in-differences (DiD) design and a sample of 1481 firm-year observations over the period 2014–2019 in China, we find that firms headquartered in areas affected by natural disasters are charged lower fees by auditors. This fee discount is not likely to be driven by a decrease in audit efforts exerted by auditors. We document that the negative relation between natural disasters and audit fees is more pronounced among (i) client firms that are audited by top domestic audit firms, (ii) client firms that are economically and politically important to auditors, and (iii) larger and more complex client firms. [ABSTRACT FROM AUTHOR]

Using a comprehensive global sample, we find that climate risk positively relates to audit fees. Specifically, auditors charge higher fee premiums when firms are located in countries with more stringent auditing regulations, higher information opacity and less adaptive capacity for climate risk. Audit fee premiums are also higher when firms are incentivised to manipulate earnings, less important to auditors, and audited by short‐tenured and industry‐specialised auditors. Our study provides worldwide evidence that climate risk induces more earnings management and increases the efforts of auditors in the auditing process, resulting in higher audit fees. [ABSTRACT FROM AUTHOR]

This paper aims to demonstrate the effects of company size, public accounting firm size, independence of the board of commissioners, size of the board of commissioners, and company risk on audit fees. The population used in this study are companies in the consumer goods industry sub-sector listed on the IDX in 2019-2022. Sample withdrawal using a purposive sampling technique with certain criteria then the data was analyzed by multiple linear regression. It is clear from the result of the analysis that the independence of the board of commissioners and the size of the board of commissioners have a positive effect on audit fees. While other variables such as company size, public accounting firm size, and company risk do not affect audit fees. [ABSTRACT FROM AUTHOR]

This study was conducted to determine the effect of audit fees, audit tenure, client size, auditor rotation, gender of the audit committee chairman, expertise of the audit committee chairman, education of the audit committee chairman and tenure of the audit committee chairman on the audit quality of manufacturing companies listed on the Indonesia Stock Exchange in 2019-2022. The total sample in this study was 120 companies with sampling techniques using purposive sampling. This study uses logistic regression analysis with Eviews 10. The results of this study indicate that audit fees, audit tenure, client size, auditor rotation, audit committee chair expertise and audit committee chair education have no significant effect on audit quality in manufacturing companies. While the gender of the audit committee chairman has a negative and significant effect on audit quality in manufacturing companies, the tenure of the audit committee chairman has a positive and significant effect on audit quality in manufacturing companies. The results of this study imply the importance of internal company factors, especially the chairman of the audit committee in supervising the company in an effort to improve audit quality. [ABSTRACT FROM AUTHOR]

SYNOPSIS: Auditing financial derivatives is complex and contentious. Our study examines the impact of derivative use on the risk premium charged by auditors of bank-holding companies (BHCs). We find that audit fees are higher regardless of whether derivative instruments are used for hedging and trading. This implies that auditors charge BHCs that use derivatives a risk premium to compensate for additional risk related to these instruments. We also find that trading derivatives tend to have a higher risk premium than hedging derivatives. Our results suggest that auditors price risks related to derivatives, and trading derivatives are perceived to be higher risk than hedging derivatives. Data Availability: All data are available from public databases identified in the paper. JEL Classifications: G21; M40; M41. [ABSTRACT FROM AUTHOR]

Research background: Issuing an annual report inquiry letter is a powerful means by which securities exchanges regulate the information of listed companies, which can convey information, reveal risks, and sustain the orderly development of capital markets. However, research on the economic consequences is limited. Purpose of the article: This study analyses the relationships and mechanisms between annual report inquiry letters, key audit matters (KAMs), and audit fees. Methods: We collected data from Chinese A-share companies listed on the Shanghai and Shenzhen Stock Exchanges between 2017 and 2022, totalling 9,903 observations. We used Stata to conduct mediation effects and heterogeneity tests on the data. We also conducted further research on the relationship between audit fees and the purchase of audit opinions. Findings & value added: The results indicate that (1) companies that receive annual report inquiry letters have higher audit fees. Furthermore, (2) companies that receive annual report inquiry letters are more likely to increase the number of disclosed KAMs, leading to higher audit fees. Finally, (3) the above relationship is more significant amongst companies audited by non-Big-Four accounting firms than amongst those audited by Big-Four accounting firms. Further, the increase in audit fees for the sample companies is not due to the purchase of audit opinions and is combined with robustness tests, further validating the conclusions of this study. These findings contribute to research on the economic impact of implementing the annual report inquiry system and new auditing standards, providing empirical evidence for the effectiveness of government oversight of capital markets. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to empirically investigate the effect of International Financial Reporting Standards (IFRS) convergence on corporate risk disclosure, with a particular emphasis on the quantity and coverage of risk information. The research also conducts economic benefit and cost analysis to investigate the economic implications that may arise from the transition to IFRS reporting. Design/methodology/approach: A content analysis approach is used to measure two broader dimensions of risk disclosure, namely, risk disclosure quantity and risk topic coverage. Furthermore, using firm-fixed effect regression on a sample of 143 Indian-listed companies, this study investigates the variations in these risk disclosure dimensions before (2012–2016) and subsequent to (2017–2021) the convergence with IFRS. Findings: The empirical results of this research demonstrate that IFRS convergence has led to a significant improvement in firms' risk disclosure across several dimensions. Particularly, during the post-IFRS period, firms' usage of risk-related words and sentences has considerably surged in MD&A, Notes and whole annual reports. In addition, upon IFRS convergence, firms' risk descriptions have become more extensive and evenly distributed across risk topic categories. Moreover, the in-depth benefit and cost analysis revealed that firms reporting under IFRS benefit from decreased cost of equity capital, but they also incur a higher cost of audit fees. Originality/value: This study contributes to the literature in two ways. First, this is the only study, to the best of the authors' knowledge, to conduct a broader examination of the impact of mandatory IFRS convergence on corporate risk disclosure, with a major focus on quantity and coverage of risk information. Second, by conducting economic benefit and cost analysis, this study provides novel insights into the critical role of IFRS risk disclosures toward multiple economic outcomes. [ABSTRACT FROM AUTHOR]

This study examines whether fair value reporting is related to audit pricing. I posit that the extent of assets and liabilities measured at fair value is positively associated with audit fees. When a client firm has a higher level of its assets and liabilities measured at fair values, its risk of financial misreporting is increased, making auditors increase their audit effort and, thereby, charge higher audit fees. Using firms covered in AuditAnalytics and Compustat database, I empirically examine an association between fair value estimates and audit fees. Consistent with my hypothesis, my findings indicate a positive relationship between the level of fair value assets and liabilities and audit fees. I also conduct several additional analyses which support the main findings. This paper contributes to the fair value literature and the audit pricing literature by offering direct empirical indication on the association between fair value reporting and audit fees. It further provides evidence on the economic consequences of SFAS 157 adoption and identifies the extent of assets and liabilities measured at fair value as one of the audit fee determinants. [ABSTRACT FROM AUTHOR]

Copyright of Financial & Business Studies Journal / Maǧallaẗ Al-Dirāsāt Al-Māliyyaẗ wa Al-Tiǧāriyyaẗ is the property of Beni Suef University and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Introduction: This study aims to reconcile conflicting empirical results from previous studies on the relationship between audit fees and audit quality. In addition, it investigated whether the contradictory findings were moderated by different types of audit fees and audit quality measures. The study also makes cross-country comparisons of empirical evidence to provide more insights. Methods: This study utilized meta-analysis to integrate the findings of previous studies on the relationship between audit fees and audit quality and further investigated moderators of the association. Results: The findings revealed that audit fees had a positive effect on audit quality. These results were observable for both developed and developing countries, indicating the beneficial consequences of audit fees on audit quality should not be overlooked. Furthermore, this study also found that the size of audit fees and quality moderated the positive influence of audit fees on the quality. Conclusion and suggestion: This study contributes to the stream of research investigating the relationship between audit fees and audit quality. To the best of our knowledge, this study represents one of the pioneering efforts to apply statistical meta-analysis to the issue addressed. [ABSTRACT FROM AUTHOR]

We study whether firms that are led by chief executive officers (CEOs) with law degrees (lawyer CEOs) have different credit ratings and costs of debt from other firms. Our sample consists of Standard & Poor's 1500 firms from 1992 to 2020, 9.2% of which have lawyer CEOs. We find that these firms have better credit ratings, compared to other firms. On average, their cost of debt is 10% lower than that of firms led by CEOs without legal backgrounds. Our results are robust to different specifications, sampling methods, and controls, such as firm and CEO characteristics. We identify two ways that CEO expertise translates into higher credit ratings: lawyer CEOs are associated with a lower future volatility of stock returns and a reduction in information risk. The decreased business risk and better financial reporting are associated with 5% lower auditing fees for firms with lawyer CEOs. [ABSTRACT FROM AUTHOR]

In this study, we examine whether audit fees are associated with job satisfaction among accounting firms' employees. We use novel data obtained from social media site Glassdoor.com and find negative associations between audit fees and accounting firms' job satisfaction. Our results are robust to alternative measures of employee satisfaction and correct for potential endogeneity problems using 2SLS regression models with instrumental variables (IVs), audit office fixed effects, and changes analysis. Our additional analysis reveals that compared to former employees' ratings, current employees' ratings play a more important role in determining the pricing of audit services. Moreover, audit fees are higher for firms audited by accounting firms with greater employee satisfaction and providing more nonaudit services. We further find that employee satisfaction at any audit level is associated with lower audit fees. Our study extends the extant literature on employee satisfaction and provides useful information for accounting firms regarding the importance of employee satisfaction to audit fees. [ABSTRACT FROM AUTHOR]

Prior research on auditor industry specialization documents fee premiums for local audit offices that are industry specialists. This research assumes that the effects of specialization are uniform across markets. We examine industry specialization based on the economic theory of industry agglomeration (geographic areas with high industry concentration). Agglomeration economies can facilitate access to knowledge for auditors serving a specific industry in those locations. We find that industry specialists in agglomerations earn a fee premium in excess of specialists in other markets. We find that nonspecialist offices in agglomerations also earn fee premiums in that industry when compared to nonspecialists in other markets even when controlling for these groups' absolute share of the national market. We also address whether or not this expertise can be shared among offices in an agglomeration specialist's firm. We find that audit offices that have easy connections to a within‐firm office in an agglomerated market can earn a fee premium relative to more distant offices, suggesting a benefit from knowledge transfer. This fee premium accrues to offices that would not be considered a specialist using traditional market share measures in a given industry. These findings indicate that the benefit of industry specialization depends on more than local market share. [ABSTRACT FROM AUTHOR]

This study analyzes the impact of the Sarbanes-Oxley Act's (SOX) ban on providing both auditing and nonaudit services by auditors to their clients. We use a first-price private value auction to compare a setting in which auditors can compete for both audit and nonaudit services with an auction in which they can compete for only one of the two services. Consistent with empirical studies, we show that the ban on nonaudit services results in fee hikes for both audit and nonaudit services, as the number of bidders (audit firms) is smaller in the post-SOX setting relative to pre-SOX setting in both auctions. Consequently, we demonstrate that, after the ban, payoffs have increased for audit firms and decreased for their clients, due to the increase in both audit and nonaudit services fees. Finally, we show that increasing the penalty for an audit failure, contrary to common wisdom, results in improved payoffs for audit firms. [ABSTRACT FROM AUTHOR]

Both practitioners and academics are increasingly focusing their attention on the riskiness of firms' tax planning activities. In this study, we examine how external auditors respond to tax risk, measured using the volatility of firms' annual cash and GAAP (Generally Accepted Accounting Principles) effective tax rates. Consistent with the notion that tax risk represents a source of engagement risk that is priced by external auditors, we first document a positive association between audit fees and tax risk incremental to fee premiums arising from tax aggressiveness. We also find that knowledge spillover benefits related to the provision of tax nonaudit services moderate this positive association. In supplemental tests, we provide evidence on additional auditor responses to tax risk. In particular, we document that tax risk is positively associated with both audit report lag and the likelihood of the auditor reporting a tax-related material weakness in the client's internal controls. Our findings add to the growing literature at the intersection of corporate taxation and auditing, and to the literature distinguishing between the level and riskiness of firms' tax avoidance strategies. [ABSTRACT FROM AUTHOR]

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This study examines the relationship between tax avoidance and asymmetric cost behavior. This relationship arises due to direct economic benefits of cash savings from tax avoidance. On one hand, cash savings from tax avoidance may prompt managers to retain excess resources when activity goes down. On the other hand, tax avoidance may alleviate managers' concerns about adjustment costs due to cost reductions in sales downturns. Using a large sample spanning the 1993-2013 period, we document a significantly negative relationship between tax avoidance, proxied by cash effective tax rate, and asymmetric cost behavior. The result suggests that asymmetric cost behavior is less pronounced when tax avoidance is higher. We further find that this relationship varies with firms' business strategies, cash flow volatility, and tax fees paid to the auditor. This study advances the understanding of accounting researchers on the relationship between tax avoidance and managers' resource adjustment decisions. [ABSTRACT FROM AUTHOR]

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

Copyright of Contemporary Accounting Research is the property of Canadian Academic Accounting Association and its content may not be copied or emailed to multiple sites or posted to a listserv without the copyright holder's express written permission. However, users may print, download, or email articles for individual use. This abstract may be abridged. No warranty is given about the accuracy of the copy. Users should refer to the original published version of the material for the full abstract. (Copyright applies to all Abstracts.)

This study aims to determine the influence of audit fee, audit tenure, and audit rotation on audit quality in coal mining companies listed on the Indonesian Stock Exchange for the period 2017 to 2021. The population of this study totaled 47 companies and the purposive sampling method resulted in 12 companies or 60 firms-years for analysis. This research is a quantitative study using secondary data in the form of annual financial reports from sample companies. Based on the test results show that audit fee has a positive effect on audit quality, meanwhile audit tenure and audit rotation have no effect on audit quality. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this study is to examine the cost of the introduction of independent audit inspections in New Zealand. Design/methodology/approach: The research is conducted using audit fee data from New Zealand and examines the overall impact of the reforms on the cost imposed on auditees. Findings: The findings show that there was no general increase in audit fees but a significant increase in audit fees for small listed companies compared to audit fees for unlisted companies and large listed companies. Practical implications: The practical implications of this study suggest that the introduction of independent inspections led to increased costs for some clients, particularly smaller listed companies, and that audit firms were able to pass on these costs to their clients. These results have important implications for policymakers and auditors alike. Originality/value: This study provides new insights into the cost of the introduction of independent audit inspections, which have been the subject of ongoing criticisms and recommendations for improvement. [ABSTRACT FROM AUTHOR]

SUMMARY: Common ownership (i.e., financial institutions' block holding stock in industry rivals) and its implications for investors are matters of current interest and debate (Securities and Exchange Commission (SEC) 2018). Motivated by this debate and the salience of common ownership, we investigate whether and how auditors price common ownership. Consistent with the notion that common ownership improves monitoring, we find common ownership is related to lower audit fees (about 6 percent lower). Further, we find that the reduction in audit fees is more pronounced for companies whose common owners (1) have stronger incentives to monitor and (2) have "scale" in monitoring. Using path analysis, we find common ownership contributes to lower audit fees through improved earnings quality. Collectively, our findings speak to the effect of monitoring mechanisms from common ownership and are of potential interest to investors and the SEC as they attempt to assess the broader implications of common ownership. Data Availability: All data used in the paper are publicly available from sources cited in the paper. JEL Classifications: M4; M42. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to collect new empirical evidence to determine how different forms of ownership structure responded to the recent COVID-19 crisis. In light of this tragedy, it explores the relationship between ownership structure forms (i.e. block-holders, foreign, institutional and family ownerships) and audit quality (proxied by audit fees). Design/methodology/approach: In total, 3,200 firm-year observations for Jordanian enterprises covering the years 2005 through 2020 are used in an ordinary least squares regression with firm-clustered standard error to assess the hypotheses. Findings: The regression results showed that COVID-19 strengthens the association between each type of ownership (i.e. block-holders, foreign, institutional ownership forms) and audit quality. This result reflects the need for high-quality audit services during the pandemic by such owners to improve their business decisions and limit agency-conflict issues. However, the analysis failed to find any effect of COVID-19 when it comes to family ownership. Family-controlled firms may react faster in crisis situations, and correspondingly, they do not bear high audit costs. The extended analysis covering the years 2005–2022 came to the same results. Practical implications: The results aid authorities in their control and management of the auditing business. The findings have important consequences for policymakers, lawmakers, regulators and the audit profession as they assess the growing issues in an uncertain economic environment. Evidence is provided that may be used to reassure investors and aid authorities as they devise appropriate remedies to the pandemic-triggered economic crisis. The findings may aid in the improvement of legislation that governs Jordan's auditing industry. Furthermore, the results can be generalized to other Middle Eastern countries. Originality/value: To the best of the authors' knowledge, this is the first study to empirically evaluate how different types of ownership affect audit quality in response to a dramatic shift in auditors' working conditions brought on by the global health calamity. In emerging economies like Jordan, this type of analysis allows for preliminary assumptions to be established about ownership status during the COVID-19 outbreak. It adds to the body of auditing knowledge by shedding light on how various kinds of ownership affect responses to adverse events. This assessment is intended to serve as the definitive testimony in the field of accounting regarding the effects of the coronavirus across various corporations' portfolios. [ABSTRACT FROM AUTHOR]

Purpose: Even though the gender literature has addressed the independent effects of female audit committee members and female audit partners on audit quality, this research primary analyses whether the association between the presence of a female audit partner and audit quality depends on (fe)male participation on the audit committee of the audited client-firm. It further examines whether the relationship between female participation on the company's audit committee and audit quality is contingent on having a (fe)male audit partner. Design/methodology/approach: A large sample of firm-year observations from the Swedish Corporation has been analyzed for the period that covers the years 2010–2019. The research hypotheses have been analyzed using the year and the industry fixed effect estimations clustered at the firm level. Findings: In accordance with "the similarity-attraction theory", the research findings provide support for a positively (negatively) significant relationship between female audit committee female representation and both audit fees and the audit reporting lag (earnings management) in client-firms of female audit partners, albeit insignificant in client-firms of male audit partners. This underscores that the presence of a female audit partner leads the beneficial link between female audit committee directorship and audit quality. Regression results on whether the relationship between female audit committee directorship and audit fees is contingent on having a (fe)male audit partner indicate that female audit partners earn higher (lower) audit fees in companies with gender-diverse (all male) audit committees. This corroborates (in somewhat) the male-female disparities in compensation within the public-audit firms' leading ranks, regarded as a male-dominated workplace worldwide. In conjunction with the argument that (compared to their male rivals) female auditors face more difficulties to reach partnership positions in the public-audit firms and are, thereby, more cautious about the loss of these positions through (in almost cases) exerting more audit efforts, and preventing their audited client-firms from manipulating earnings, the authors reveal that female audit partners are associated with longer (lower) audit reporting lags (earnings management) in both companies with gender-diverse and companies with all-male audit committees. The authors therefore conjuncture that the beneficial female auditor effect on audit quality is not contingent (in somewhat) on (fe)male participation on the company's audit committee. Collectively, the baseline reported results seem sound as they dissipate for a host of alternative metrics for both the dependent and the independent variables. Collectively, the baseline reported results seem sound as they dissipate for a host of alternative metrics for both the dependent and the independent variables. Originality/value: This study heeds the recent claim for examining the gender effect on the interpersonal interaction between the main participants in the company's auditing process. [ABSTRACT FROM AUTHOR]

The purpose of this study is to examine the relationship between top management school-ties represented by the CEO (Chief Executive Officer), CFO (Chief Financial Officer), and the Auditor with the Audit Fee. This study uses 627 observations from companies listed on the Indonesia Stock Exchange from 2010 to 2018 and uses the Ordinary Least Square Regression analysis model. This study finds that the combination of school-ties between CFO and Auditor showed a positive relationship with Audit Fee, while the combination of school-ties between CEO and Auditor did not. This study contributes to literature related to the relationship between school-ties and audit fees of public companies in Indonesia. It is also hoped that it can contribute to the implementation of company policies, management, external parties, named regulators, and investors. This study chose school-ties as a part of social-ties to represent the condition of Top company officers and Auditors ties. JEL Classification: H83, M42, G32, G34 [ABSTRACT FROM AUTHOR]

Purpose: This paper investigates whether the audit fees of Chinese listed firms are associated with the share pledging practice of the firm's controlling shareholders. Design/methodology/approach: This study uses the audit pricing model to estimate the association between the share pledging of listed firms and audit fees. Cross-sectional analysis is conducted on a large sample of Chinese listed firms during the period 2004 to 2019. The authors further test the moderating effects of listing on the Main Board, state ownership and abnormal audit report lag on the association between share pledging and audit fees. The results remain robust to various endogeneity tests including two-stage least squares instrumental variable analysis, entropy balancing analysis and difference-in-difference analysis. Findings: The study finds that audit fees are positively associated with the proportion of shares pledged by the listed firm's controlling shareholder in China. The results also provide new evidence that the positive association between audit fees and the share pledging of controlling shareholders could be mitigated if the firm is listed on the Main Board and/or it is a state-owned enterprise. In contrast, pledged firms with abnormal audit report lag are found to have higher audit fees than their pledged counterparts without the excessively long audit delay. Practical implications: Findings of this study have important practical implications to those charged with governance, as boards need to comprehensively understand the adverse consequences of share pledging when pursuing it as the firm's major source of financing. The study also has policy implications for stock market regulators such as the China Securities Regulatory Commission in China. Regulators could consider developing a threshold-based share pledging disclosure and pledge ratio requirements based on factors such as a firm's listing status and ownership structure. Originality/value: This study provides new evidence on the audit-related consequences of share pledging in a significant capital market. Findings of this study also enrich the existing audit literature by introducing the share pledging activities of controlling shareholders into the audit pricing decision-making model. [ABSTRACT FROM AUTHOR]

Purpose: Recent studies have concluded that auditors underreport existing internal control over financial reporting (ICFR) weaknesses. This study aims to assess how effective external auditors are, as independent third parties, at disclosing reliable opinions to the public on the ICFR. Design/methodology/approach: Using a logistic regression, the authors analyzed a sample of 106 US companies classified as large accelerated filers or accelerated filers consisting in 53 companies which restated their financial statements and a control group of 53 companies having "clean financial statements" at any given moment during the research period, between 2005 and 2018. Findings: The results indicate that only 34% of companies with financial statements deemed unreliable have received an adverse ICFR opinion issued by the external auditor during the misrepresentation period or its prior year. The authors also notice that external auditors are somewhat effective in identifying and disclosing red flags to the public that certain companies have internal control (IC) material weaknesses. The results also indicate that the average presence of an adverse IC opinion issued by the external auditor during the misrepresentation period or its prior year for companies with unreliable financial statements is higher than for companies with financial statements deemed reliable. Practical implications: This study tests if an increase in efforts and disbursements with audit fees are justifiable by external auditors' issuing effective, reliable opinions and reinforcing a more transparent and ethical capital markets environment, that is, an environment where accurate information is available for stakeholders. If external auditors are negligent in providing a qualitative and independent opinion to stakeholders, the increase of disbursements made with audit fees is less justifiable. Thus, the research has practical implication for auditors as well as standard setters. Originality/value: This study extends the literature on ICFR by empirically testing whether the public can rely on external auditors' opinions expressed on Sarbanes–Oxley Section 404 reports. [ABSTRACT FROM AUTHOR]

This research aims to analyze the impact of tax avoidance on audit fees in Indonesian Stock Exchange (IDX) companies in 2013- 2015. This research used book-tax differences and book-tax conformity as a proxy for tax avoidance. The result of book-tax differences as a proxy of tax avoidance showed a significant effect on audit fees, indicating that the bigger the negative book-tax differences, the more the audit fees. On the other hand, the result of book-tax conformity as a proxy of tax avoidance showed that there is no significant effect on audit fees. Thus, book-tax differences is preferable to book-tax conformity as a proxy for tax avoidance. This research does a difference test of the impact of large book-tax differences and small book-tax differences on the audit fees as an additional analysis. The result showed that large book-tax differences is more significant than the other. This research also does a difference test of the impact of large positive book-tax differences and large negative book-tax differences on audit fees. It indicates no significant difference between the effect of large positive book-tax differences and large negative book-tax differences on audit fees. [ABSTRACT FROM AUTHOR]

Guided by a call for research on small entities using innovative methodologies, this study is the first to analyse small municipality audit fees on a per capita basis. The research utilises a complete dataset of all 92 Connecticut municipalities that meet the study criteria and does not rely on samples or survey results. The measure of per capita was utilised to account for differences between town populations allowing for a more accurate comparison of audit fees and audit fee determinants across municipalities of differing populations. Consistent with the premise that auditee characteristics are an important consideration in audit fees, we find that when examining audit fees on a per capita basis in the subset of small municipalities: (1) smaller towns pay considerably more for audit services than larger towns, (2) towns with an ethics committee oversight function and best practices financial reporting practices have lower per capita audit fees than those that do not and (3) audit firm size, audit firm tenure and existence of audit/finance committee oversight have no significant impact on per capita audit fees. The results of this study help fill a void in the audit literature by providing insights into audit fee determinants in small municipalities by considering the added feature of a per capita analysis. The authors also sought to provide additional information for consideration in the International Auditing and Assurance Standards Board (IAASB) efforts to streamline standards for auditing of less complex entities. [ABSTRACT FROM AUTHOR]

Despite decades of research on audit fees, we know very little about the cost to produce an audit. In this paper, we discuss the nature of fixed and variable costs in the audit process. We then use this cost perspective to examine the debate about the pricing of initial audit engagements, an event where marginal costs and marginal revenues are likely to diverge. This is often referred to as 'lowballing' which, technically, means delivering a service below cost. However, a fee discount does not necessarily indicate that revenue is below cost for an engagement. Using a sample of engagements from regional audit firms, we analyse audit fees, actual costs, and contribution margins. We find that actual contribution margins are generally positive in new engagements, suggesting that fee discounts do not result in lowballing. We attribute this to a firm pricing audits conditional on an understanding of their fixed cost structure. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to examine the effect of carbon emissions on audit fees. The authors hypothesize that firms in cities with higher carbon emission levels have lower reporting transparency, higher return volatility or are subject to higher reputation risk, causing them to be charged higher audit fees for auditing services. Design/methodology/approach: The authors use panel data of 25,960 firm-year observations from a sample of Chinese firms. The carbon emission data for each Chinese city are obtained from the China Emission Accounts and Datasets for Emerging Economies. This paper adopts a multiple regression model to study the impact of carbon emissions on audit fees. Findings: The authors find that firms located in cities with higher carbon emission levels and firms with more carbon emissions are charged, on average, a higher audit fee. This audit fee effect of carbon risk is transmitted by lessened information transparency and elevated financial risk within these firms. This paper shows that auditors consider carbon risk in their audit fee decisions and other factors that could influence audit risk and effort. Originality/value: This study draws a connection between carbon emissions and audit fees. It is especially relevant due to the increasing importance of environmental factors in the audit risk assessment. In addition, the findings suggest that a firm implementing a proactive environmental strategy benefits the economy and decreases the costs to the firm for services such as auditing. [ABSTRACT FROM AUTHOR]

Purpose: The purpose of this paper is to examine the impact hosting the Super Bowl has on audit completion and financial reporting timeliness for companies headquartered in Super Bowl hosting cities. Design/methodology/approach: Using 16 years of financial reporting data, this study uses the Super Bowl and related activities, combined with required filings during "busy season," as a natural experiment to examine how audit firms navigate short-term, exogenously imposed but anticipated, audit team capacity constraints. Findings: Companies headquartered in a city hosting the Super Bowl, during busy season, have longer audit report lags (by approximately three days, in comparison to non-hosting busy season audits) and less timely securities and exchange commission (SEC) (10-K) filings. The authors find no evidence that Super Bowl hosting affects audit fees or earnings announcement timeliness. Practical implications: When confronted with anticipated capacity shocks, audit firms take longer to complete the audit, absorbing the financial costs of the delay and maintaining audit quality, resulting in less timely financial reporting. Originality/value: This study demonstrates the costs of Super Bowl-related inefficiencies and contributes to our understanding of how auditors navigate capacity shocks. This study provides evidence that auditors can effectively manage business risk and continue to facilitate providing timely and accurate information to financial statement users in the face of a capacity shock. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to investigate whether accounting-related litigation is associated with a break in the client's earnings string and the auditor's response to a break in the earnings string. Design/methodology/approach: The authors use regression models on a sample of publicly-traded USA companies with earnings strings. Findings: The authors find that clients' earnings string breaks are associated with increased accounting litigation risk and audit fees. The results are more prevalent for larger breaks. Research limitations/implications: The findings suggest auditors anticipate string breaks by clients which implies that audit fee research should consider earnings string characteristics in the fee models. Practical implications: The auditor's access to private information allows them to anticipate string breaks and potential increase in litigation risk. Originality/value: An earnings string break represents a convergence of concerns highly relevant to the auditor: more users relying on the financial statements with greater expectations, increased likelihood of losses to those users, an environment where the likelihood of misstatement may increase, and explicitly stated professional responsibilities in response to the latter. Despite that, and a rich earnings string literature, prior studies have not directly examined auditors' response to a client's string break. [ABSTRACT FROM AUTHOR]

Audit quality (AQ) is value-relevant if the information is capable of making a difference in the decisions taken by various stakeholders. Therefore, the provision of non-audit services (NAS) to clients, and auditors can create economic bonding and self-review threats that compromise independence and AQ (Friedrich & Quick, 2023). The study investigates the effects of NAS on AQ in the Nigerian insurance industry. The ex-post facto research design was adopted and data were sourced from the annual reports of the 22 insurance companies listed on the Nigerian Exchange Group (NGX) between 2015 and 2020 and sampled through a filtering method. The study used descriptive statistics, correlation matrix, and binary regression techniques to test the formulated hypotheses. The study made use of a binary logistic econometric approach because the dependent variable is a dummy variable assuming the value of "1" and "0". In agreement with the study of Pappert and Quick (2022), the regression results revealed that the provision of NAS, audit fees, and firm size significantly affect AQ in the Nigerian insurance industry, while auditor tenure had an insignificant effect on AQ. The study recommended that the provision of NAS should be strengthened and monitored to align with the list of services that auditors are not prohibited from rendering to the client. [ABSTRACT FROM AUTHOR]

This study examines how external auditors respond to the disclosure of cyber exposures by commercial banks and how the COVID-19 pandemic period accentuates the effect of voluntary cyber risk disclosures (CRDs) on audit fees. Our study is a preliminary study analysing the CRD of the financial industry in emerging economies in the Association of Southeast Asian Nations (ASEAN). It extends Calderon and Gao's (2021) study one step further with respect to the COVID-19 pandemic and identifies items by using manually collected keywords to extract CRDs. During the period 2015-2020, our samples are 63 listed banks in four ASEAN members (Indonesia, Malaysia, Thailand, and the Philippines -- ASEAN-4) and the one-step generalized method of moments (GMM) is used. The study found that audit fees are significantly associated with CRD, including risk causes and impacts. Meanwhile, cyber risk governance disclosures affect audit fees after a one-year lag. This indicates that voluntary CRD is informative. Audit fees are also significantly affected by the interaction between CRD and COVID-19. It suggests that auditors incorporate the nature and content of client CRDs into their fee structure and directly support regulatory reporting requirements in emerging ASEAN countries to include cyber risk factors in annual bank statements. [ABSTRACT FROM AUTHOR]

The audit charge fee is one of the most crucial elements in the audit procedure. Audit fees that deviate from the usual either in higher or lower amounts are considered abnormal audit fees. Abnormal audit fees were found to affect final audit quality based on previous studies. The current study intends to analyze the elements that influence abnormal audit fees in Indonesia by focusing on how firm size, firm complexity, audit firm size, leverage, profitability, and family ownership affect abnormal audit fees. Thirty-two industrial companies represented on the Indonesia Stock Exchange (IDX) were selected as representative manifestations for the 2017-2021 period using a purposive sampling technique. Panel data regression is used to test secondary data that has been collected. This study found that firm size, leverage, profitability, and audit firm size have a positive effect on abnormal audit fees. However, this investigation did not find the effect of family ownership and firm complexity on abnormal audit fees. Therefore, clear and transparent procedures are required for the auditor in determining the optimal audit service fees to increase the credibility of financial reporting. In addition, the regulation is expected to be able to prevent unfair competition between public accounting firms. [ABSTRACT FROM AUTHOR]