Impact of economic policy uncertainty on audit fees: Evidence from Chinese listed companies
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DOIhttp://dx.doi.org/10.21511/ppm.21(3).2023.53
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Article InfoVolume 21 2023, Issue #3, pp. 682-697
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High economic policy uncertainty in China amplifies operational risks and managerial pressure for businesses while driving the demand for independent audits. However, previous studies have paid limited attention to the impact of economic policy uncertainty on audit fees. This study aims to examine the impact of economic policy uncertainty on audit fees and to test whether the internal control quality will moderate this association at the firm level. This study employs the economic policy uncertainty index to measure uncertainty. The paper examines 3,469 Chinese A-share listed companies from 2007 to 2020, using STATA 17 for fixed-effects regression on panel data. The results show a robust positive association between economic policy uncertainty and audit fees (β = 0.0302, p < 0.001). However, this association is weaker for companies with better internal control quality (β = –0.0229, p < 0.001), suggesting that effective internal controls can mitigate the impact of economic policy uncertainty on audit fees. Furthermore, the findings indicate that this positive association is weaker for state-owned companies compared to non-state-owned companies (β = –0.0170, p < 0.001). At the same time, the study does not establish a significant difference in the positive association between TOP 10 and non-TOP 10 accounting firms. This study examines the adverse effects of economic policy uncertainty from the perspective of audit fees. The results have implications for stakeholders, including the need for companies to establish effective internal controls and good government-business relationships and for governments to reduce economic policy uncertainty and increase transparency in their policies.
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JEL Classification (Paper profile tab)E60, M41, M42
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References71
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Tables9
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Figures1
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- Figure 1. Research framework
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- Table 1. Sample selection procedure
- Table 2. Sample distribution by year and industry
- Table 3. Descriptive statistics
- Table 4. Pairwise correlations analysis
- Table 5. Main regression analysis
- Table 6. Moderating effect test
- Table 7. Robustness check
- Table 8. Heterogeneity analysis
- Table A1. Variables and definition
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What do we know about empirical joint audit research? A literature review
Patrick Velte
doi: http://dx.doi.org/10.21511/afc.01(1).2017.01
Accounting and Financial Control Volume 1, 2017 Issue #1 pp. 4-14 Views: 1988 Downloads: 1269 TO CITEThis literature review evaluates empirical studies which concentrate on economic effects on joint audits from an international perspective. We briefly introduce the theoretical and empirical joint audit framework that comprises an adequate structure of the state-of-the-art of empirical research in this field. This is followed by a discussion of the following output factors of joint audits: (1) audit quality; (2) audit costs and (3) audit market concentration. We will summarize the key findings in each area, and provide a description of the analyzed proxies. Finally, we will discuss the current limitations of the studies and give useful recommendations for future empirical research activities in this topic.
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Investigating the effect of corporate governance on audit quality and its impact on investment efficiency
Walid Shehata Mohamed Kasim Soliman
doi: http://dx.doi.org/10.21511/imfi.17(3).2020.14
Investment Management and Financial Innovations Volume 17, 2020 Issue #3 pp. 175-188 Views: 1376 Downloads: 522 TO CITE АНОТАЦІЯThere is an academic discussion about investment efficiency, regarding its determinants and effects. Corporate Governance (CG) and Audit Quality (AQ) are determinants of investment efficiency The main objective of the article is to investigate the effect of CG and AQ on investment efficiency, this objective is divided into sub-objectives: to investigate the direct effect of CG on AQ, AQ on investment efficiency, and CG on investment efficiency. Moreover, the indirect effect of CG on investment efficiency through AQ as a mediator variable. This paper focuses on non-financial listed firms in the Egyptian Stock Exchange (EGX), especially firms recorded in EGX 100 for four years’ period (2013–2018), for 103 firms and 412 completed observations. The researcher uses Structural Equation Modeling (SEM) through SmartPLS software. The paper shows evidence that management that has good CG mechanisms obtains a suitable atmosphere to prepare transparent financial statements, which helps enhance the auditor’s role and improve AQ. Improving AQ lowering IA, which increases the trust of investors in management decisions, this leads to reduce pressure on management and improve efficiency of investment decisions. Having good CG mechanisms provides management with a good atmosphere to make right investment decisions, and having good CG mechanisms increases AQ, which helps management to have a good environment to make investment decisions with higher efficiency, or in other words, there is a significant and positive effect of integration between CG and AQ on investment efficiency.
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The impact of ownership structure on external audit quality: A comparative study between Egypt and Saudi Arabia
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