Board Characteristics and Audit Fees

Carcello, Joseph V.; Hermanson, Dana R.; Neal, Terry L.; Riley, Richard A.

doi:10.1092/chwk-gmq0-mlke-k03v

Cited by 119 publications

(271 citation statements)

References 12 publications

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“…[15] and [12] found that audit committee independence has a significant and positive relationship with audit fees. However, this finding contrasted that of [11,14,17]. The results found in [12] on the relationship between audit committee expertise and audit fees also contrasted with the findings of [13,16,15,17].…”

Section: Introductioncontrasting

confidence: 61%

“…The results found in [12] on the relationship between audit committee expertise and audit fees also contrasted with the findings of [13,16,15,17]. Similarly, [15] and [17] found that the frequency of audit committee meetings has a significant and positive relationship with audit fees did not support the findings of [11] and [12]. In the study of [12], there was no evidence to show that board independence has a significant relationship with audit fees; this result was not supported by [13,15,17].…”

Section: Introductionmentioning

confidence: 65%

“…Companies with an effective AC are likely to be charged with higher audit fees in post-2007 Code period. FourA 2016 04003 (2017) To be truly effective, a board needs more independent [11,23] and diligent [11] directors on the board. Previous studies have found that a higher percentage of independent directors on the board helps to reduce the frequency of fraudulent financial reporting [24] and lower the occurrence of earnings overstatement [25].…”

Section: The Effectiveness Of Audit Committees (Ace) and Audit Fees (Af)mentioning

confidence: 99%

“…[26] suggested that an effective board meets frequently. The board that meets frequently shows better diligence in discharging its responsibilities and improving its governance role of monitoring the financial reporting process [11]. Consistent with the best practices in corporate governance that recommended in the 2007 Code, we also included the board duality as one of the measurement for an effective board [7].…”

Section: The Effectiveness Of Audit Committees (Ace) and Audit Fees (Af)mentioning

confidence: 99%

“…These studies are based on settings in the US [11,12,13], the UK [14,15,16], Australia [17] and Malaysia [18,19,20].…”

Section: Introductionmentioning

confidence: 99%

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Corporate Governance Quality and Audit Quality in Malaysia

2017

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Abstract. This paper examines the impact of corporate governance quality on audit quality in Malaysia. The sampling frame is 457 Malaysian non-finance listed companies, over the periods 2003 (pre-2007 Code period) and 2008to 2012 (post -2007 Code period), consisting of 2,285 observations for each period. This study uses pooled ordinary least square (OLS) to test the research hypotheses and model. The results show that the effectiveness of the audit committee (AC) has no significant influence on audit fees in the pre-and post-2007 Code period, and the effectiveness of the board has no significant influence on audit fees in the pre-2007 Code period, although it has significant influence on audit fees in the post-2007 Code period. The results suggest that the existing corporate governance framework in relation to AC has limitation in its governance role on audit process. Our study contributes to existing literature conducted in the US, the UK and Australia where their institutional settings are different from that of Malaysia. In addition, our study is based on the 2007 Code's recommendation which contributes to the previous research conducted in Malaysia and provides an insightful evidence to the regulator on the corporate governance regime in Malaysia.

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Section: Introductioncontrasting

confidence: 61%

Section: Introductionmentioning

confidence: 65%

Section: The Effectiveness Of Audit Committees (Ace) and Audit Fees (Af)mentioning

confidence: 99%

Section: The Effectiveness Of Audit Committees (Ace) and Audit Fees (Af)mentioning

confidence: 99%

“…These studies are based on settings in the US [11,12,13], the UK [14,15,16], Australia [17] and Malaysia [18,19,20].…”

Section: Introductionmentioning

confidence: 99%

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Corporate Governance Quality and Audit Quality in Malaysia

2017

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Book‐Tax Differences, Corporate Governance Effectiveness and Audit Quality: An Interactive Effects

Riguen¹,

Kachouri²,

Jarboui³

2018

J Corp Accounting Finance

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In this article, we aim to answer the important questions of whether the corporate governance effectiveness affects the relationship between book‐tax differences (BTDs) and audit quality. We also aim to determine whether the variability between BTDs and audit quality is moderated by corporate governance index (CGI). The primary aim of the present study is to contribute to improving the existence of an interaction between BTDs, audit quality, and CGI. This study uses a sample of 28 nonfinancial listed Tunisian companies and covers an eight‐year period from 2005 to 2015. To test the hypotheses of this research, a generalized least squares (GLS) and ordinary least squares (OLS) regression was applied. The results obtained show that, for the Tunisian companies, a positive association between BTDs and audit quality. The current study also provides evidence that corporate governance moderates the relationship between BTDs and audit quality. The findings may be of interest to the academic researchers, practitioners and regulators who are interested in discovering the quality of corporate governance practices and tax practices in Tunisian context. The findings of this study can help Tunisian regulators in creating corporate governance disclosure requirements. The findings also provide the African business community insights concerning audit quality, tax practices, and corporate governance. This article extends the existing literature, by examining the inter‐relationship between corporate governance, BTDs, and audit quality. © 2019 Wiley Periodicals, Inc.

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PCAOB inspection deficiencies and audit fees

Alam,

Cheng,

Rickett

et al. 2023

J Corp Accounting Finance

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This study aims to extend research on the effect of PCAOB inspections on audit firm behavior by examining generally accepted auditing standards (GAAS) and generally accepted accounting principles (GAAP) type PCAOB inspection deficiencies, separately, to reveal the differential effects on audit fees in subsequent years. We empirically examine the audit fees of 98,393 client firm‐year observations for auditors who received a PCAOB inspection report during 2004–2021 via multivariate regression analyses. We find that GAAS (GAAP) deficiencies are associated with higher (lower) audit fees in the years following the reported deficiency. Our results suggest that the PCAOB inspection process modifies audit firm behavior when GAAS deficiencies are reported leading to the firm charging higher audit fees to defray the costs of addressing the deficiencies, but due to the severity of GAAP deficiencies that are identified, audit firms are willing to negotiate lower fees to retain the client. Our results are primarily driven by annually inspected audit firms. These results suggest that auditors respond to GAAS and GAAP PCAOB inspection deficiencies differently. The results of our study are useful to regulators and policymakers, such as the SEC and the PCAOB, in understanding how auditors respond to PCAOB inspection deficiencies and their due diligence to correct those deficiencies. PCAOB inspections are intended to evaluate compliance with accounting and auditing standards to improve audit quality and our study helps to extend the research to date which has not yet clearly demonstrated whether or not this has been accomplished.

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Board Characteristics and Audit Fees

Cited by 119 publications

References 12 publications

Corporate Governance Quality and Audit Quality in Malaysia

Corporate Governance Quality and Audit Quality in Malaysia

Book‐Tax Differences, Corporate Governance Effectiveness and Audit Quality: An Interactive Effects

PCAOB inspection deficiencies and audit fees

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