volume 35, issue 3, P345-372 2019
DOI: 10.1108/maj-02-2019-2177
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Qiao Xu, Guy Fernando, Kinsun Tam, Wei Zhang

Abstract: Purpose This paper aims to investigate whether audit fees and financial report readability are bi-directionally related. Design/methodology/approach The authors test their hypotheses with empirical data. Specifically, they adopt a two-stage simultaneous equation regression model to assess the bi-directional relationship between audit fees and financial report readability. Findings While poor readability increases the fees charged by the auditor, higher audit fees improve the readability of the financial r…

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