The impact of changes in cash flow statement items on audit fees: evidence from Iran

Salehi, Mahdi; BehrouziYekta, Masoumeh; Ranjbar, Hossein Rezaei

doi:10.1108/jfra-09-2018-0074

Cited by 9 publications

(8 citation statements)

References 76 publications

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“…Charl et al (2013) audit fees are sticky, as they do not immediately or thoroughly adjust to changes in their determinants. Salehi et al (2020) argue that ICE will likely mitigate audit risk by improving organisational operations. According to these arguments, we expect that more efficient ICCs within a company, which has resulted in lower agency problems between agent and principal, may result in less audit risk and, subsequently, sticky behaviour of audit fees.…”

Section: Intellectual Capital Components and Audit Fees Stickinessmentioning

confidence: 99%

The effect of intellectual capital on audit fees stickiness

Salehi

Asadian

Khansalar

2023

ARJ

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Purpose This study aims to evaluate the effects of intellectual capital (IC) efficiency and its components on audit fee stickiness (AFS), such as human capital (HC), organisational capital (OC), structural capital (SC) and relational capital (RC). Moreover, the moderating roles of audit industry specialisation (AIS), tenure and auditors’ market concentration are also estimated. Design/methodology/approach This study’s method is descriptive-correlational based on the information disclosed by listed firms on the Tehran Stock Exchange from 2012 to 2018 using 1,316 year-firm. The method used for hypothesis testing is linear regression using panel data. Findings The results show that all the intellectual capital components (ICCs), including HC, SC, OC and RC, negatively impact audit fees (AFS). Further analyses also show that the AIS moderates the relationship between ICCs and AFS. Originality/value This paper is one of the pioneer studies assessing the auditors’ response to the riskless environments driven by existing IC.

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Section: Intellectual Capital Components and Audit Fees Stickinessmentioning

confidence: 99%

The effect of intellectual capital on audit fees stickiness

Salehi

Asadian

Khansalar

2023

ARJ

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“…Audit committee formation has been a prerequisite of regulations in developed and developing countries, thus attracting scholarly efforts to investigate regarding its establishment, attributes and activities (McMullen, 1996; Zhou et al , 2018; Salehi et al , 2020). For example, some of the topics assessed in previous research include voluntary formation of audit committees (Pincus et al , 1989; Bradbury, 1990), activities of audit committees (Collier and Gregory, 1999), auditor support and audit committee composition (DeZoort et al , 2003), independence of audit committees (Klein, 2002) and audit committee financial expertise (Krishnan, 2005; Salleh et al , 2017; Zalata et al , 2018).…”

Section: Literature Review and Hypotheses Developmentmentioning

confidence: 99%

Corporate governance and firm performance: empirical evidence from Jordan

Alodat

Salleh

Hashim

et al. 2021

JFRA

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Purpose This study aims to assess the effect of director board and audit committee attributes and ownership structure on firm performance. In general, resource dependency and agency theories have underlined the superior performance of firms equipped with stronger Corporate Governance (CG) versus those of deficient governance. Concurrently, the study delineated the provisions of ownership structure provision, specifically foreign ownership and institutional ownerships, thus describing the component denoting the structural significance in explicating firm performance. Design/methodology/approach The current study implemented an empirical approach involving the construction of extensive CG measures thus, subjected to 81 non-financial firms listed on the Amman Stock Exchange spanning the period of 2014–2018. Findings The current study identified the positive and significant relationship between the board of directors and audit committee characteristics with the firm performance measures tested, namely, return on equity (ROE) and Tobin’s Q. In terms of ownership structure, both foreign and institutional ownerships yielded a significant and positive relationship with ROE. Meanwhile, Tobin’s Q led to an insignificant and negative relationship between both ownership types and firm performance measures. Practical implications The analytical outcomes substantiate the possibility of enhanced performance shown by growing global firms because of the implementation of CG mechanisms, specifically because of the practices resulting in minimised agency costs. Originality/value The current study offers novel evidence detailing the impact of CG effectiveness towards performance and its implementation in emerging markets following the minimal amount of scholarly efforts on the topic. It is a timely contribution towards the current understanding of the relationship linking governance and performance for the purpose of ensuring the adoption and imposition of a strong corporate governance code by the government.

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“…They found CFOs powerful in predicting future cash flows than earning and traditional measures. Salehi et al (2018) studied the effect of cash flow statements on audit fees on the companies listed on the Tehran Stock Exchange and found that excess cash holdings reduce the audit fees. Amuzu (2010) studied individual data points from 2003 to 2005 for listed Ghanaian companies.…”

Section: Introductionmentioning

confidence: 99%

Cash flows and financial performance in the industrial sector of Saudi Arabia: With special reference to Insurance and Manufacturing Sectors

Rahman

Sharma

2020

Investment Management and Financial Innovations

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A firm with proper cash flow management can increase its financial performance, while improper management might lead to financial failure. Therefore, it is significant for a firm to manage cash inflows and outflows properly. The current study investigates the effect of cash flow from operations (CFOs) on the financial performance of insurance and manufacturing companies in Saudi Arabia. The data were extracted from companies’ annual reports by considering Return on Assets (ROA) and Return on Equity (ROE) as dependent variables, CFOs as an explanatory variable, firm size (SIZE) and Leverage (LEV) as control variables, and an industry dummy. The results report a positive and significant association between financial performance (ROA and ROE) and operating cash flows (CFOs), and a negative association for SIZE and LEV. Therefore, the study concludes that the firms’ operating cash flows in the insurance and manufacturing sectors in Saudi Arabia affect financial performance.

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The impact of changes in cash flow statement items on audit fees: evidence from Iran

Cited by 9 publications

References 76 publications

The effect of intellectual capital on audit fees stickiness

The effect of intellectual capital on audit fees stickiness

Corporate governance and firm performance: empirical evidence from Jordan

Cash flows and financial performance in the industrial sector of Saudi Arabia: With special reference to Insurance and Manufacturing Sectors

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