Abnormal audit fees and future restatements: evidence from Tehran Stock Exchange

Salehi, Mahdi; Farhangdoust, Shayan; Vahidnia, Adineh

doi:10.1504/ijaape.2017.10002695

IJAAPE

2017

DOI: 10.1504/ijaape.2017.10002695

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Abnormal audit fees and future restatements: evidence from Tehran Stock Exchange

Mahdi Salehi

Shayan Farhangdoust

Adineh Vahidnia

Abstract: Abstract:The aim of this paper is to provide empirical evidence for the impact of abnormal audit fees on future restatements. We examine whether firms that restate their financial statements have higher levels of total audit fees than their counterparts. In this regard, the authors test their hypothesis by performing panel data analysis on a sample of 936 firm-year observations from companies listed on the Tehran Stock Exchange during 2009-2014. We find that there is a negative relationship between the two; sp… Show more

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Cited by 2 publications

References 35 publications

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A theoretical approach to auditor independence and audit quality

Yakubu¹,

Williams

2020

COC

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Auditor independence and the quality of audit report is of growing concern to regulators, institutional investors and stakeholders as a series of accounting scandals have undermined the professionalism of auditors. The findings from this study produced an insight of how auditor’s independence improve audit quality and that abnormal audit fees is as a result of additional effort for auditor to carry out rigorous audit engagement as a result of wider audit scope; that mandatory audit firm rotation will enhance auditor independence, and that audit committee with nonexecutive independence will promote audit quality. The study also finds that in terms of auditor size, smaller audit firms that belong to professional bodies will provide higher audit quality. The main conclusion of this research is that where an auditor is fully independent in carrying out audit engagement with strong resistance to fees pressure will enhance audit quality. This research provides insight into the impact of IFRS adoption on audit fees.

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A theoretical approach to auditor independence and audit quality

Yakubu¹,

Williams

2020

COC

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Determinants of abnormal audit fees in international financial reporting standards-based financial statements

Emife,

Jeroh

2022

Ekon horizonti

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This study essentially examines the audit effort as a possible determinant of the abnormal audit fees evinced in International Financial Reporting Standards-based financial statements. Therefore, the secondary data were sourced from the audited annual reports and the relevant financial statements of the Nigerian listed banks for the period of observation (2010-2019). An analysis was performed using the relevant techniques that include descriptive statistics, the correlation matrix and panel regression. The findings showed that the IFRS, the client complexity (CPX) and the client size (SIZ) were negatively correlated with abnormal audit fees (ABFEE), whereas joint audit (JAD) recorded a positive correlation with such abnormal audit fees. Lucidly, joint audit showed a stronger relationship with abnormal audit fees, whereas the client size showed a significant, but negative relationship with abnormal audit fees. Similarly, the fact that, with a probability value 0.9494, the relationship between ABFEE and the client complexity was not significant was noticed. Given these research outcomes, it can be concluded that abnormal audit fees are primarily motivated by extra or unexplained audit efforts and the costs associated with them. It is, therefore, recommended that, proportionately with the service(s) rendered, accounting professional bodies should review, harmonize and tactically institute a limit for professional charges through the enforcement of regulated benchmarks for audit fees payable by clients.

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Abnormal audit fees and future restatements: evidence from Tehran Stock Exchange

Cited by 2 publications

References 35 publications

A theoretical approach to auditor independence and audit quality

A theoretical approach to auditor independence and audit quality

Determinants of abnormal audit fees in international financial reporting standards-based financial statements

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