Wiley Practitioner's Guide to GAAS 2020

Flood, Joanne M.

doi:10.1002/9781119596042

Cited by 2 publications

(1 citation statement)

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“…There are two main motivations for this study. First, American Institute of Certified Public Accountants (AICPA) standards recommend that auditors focus on the characteristics of the executive team when assessing client risk, as fraud may be related to attitudes or personal characteristics (Flood, 2020;Quan et al, 2021). Previous studies (e.g.…”

Section: Introductionmentioning

confidence: 99%

Association between executives’ foreign background and audit fees

Su,

Yin

2023

RAF

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Purpose This study aims to investigate the association between executives with foreign backgrounds and the audit fees paid by the Chinese-listed firms over the period from 2010 to 2020. Design/methodology/approach To examine the association between executives’ foreign experience and audit fees, this study constructs the following empirical model: Lnfeei,t = β0 + β1Foreign backgroundi,t + ∑βj Controli,t + YearFE + IndFE + εi,t (1). Findings This study finds that auditors charge higher fees for firms hiring more executives with foreign backgrounds. The results are robust to a battery of robustness checks, including fixed effects, alternative measures of independent variable, controlling for other characteristics of executives and auditors and entropy balancing method. Originality/value This study sheds light on how executives’ foreign backgrounds affect audit fees, enriching the literature on executive heterogeneity and audit fees and providing important implications for audit practitioners.

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Section: Introductionmentioning

confidence: 99%