Are audit fees discounted in initial year audit engagements?

• 成果类型: Article
• 署名作者: Barua, Abhijit; Lennox, Clive; Raghunandan, Aneesh
• 署名单位: State University System of Florida; Florida International University; University of Southern California; University of London; London School Economics & Political Science
• 刊物名称: JOURNAL OF ACCOUNTING & ECONOMICS
• ISSN/ISSBN: 0165-4101
• DOI: 10.1016/j.jacceco.2019.101282
• 发表日期: 2020
• 关键词: industry specialization; nonaudit services; earnings quality; INTERNAL CONTROL; management; equity; SOX; INFORMATION; COMPETITION; disclosure

摘要

Many studies report that audit fees are discounted in the year of an auditor change and regulators have long been concerned that such fee discounting could impair audit quality. We find significant bias in the way studies have tested for fee discounting. The bias exists because interim procedures are usually performed by both the predecessor and successor auditors but only the successor's fee needs to be disclosed. Accordingly, the disclosed fee during the auditor change year usually relates to a partial year of auditing services. We find that the evidence for fee discounting disappears after correcting for this measurement bias. (C) 2019 Elsevier B.V. All rights reserved.