Oil price uncertainty and audit fees: Evidence from the energy industry

Fenghua Wen, Meng Chen, Yun Zhang and Xiao Miao

Energy Economics, 2023, vol. 125, issue C

Abstract: This study examines how oil price uncertainty, measured by implied volatility, affects audit fees. Using samples from the energy industry, we find that oil price uncertainty increases audit fees. Furthermore, the mechanism analyses demonstrate that the increase in audit fees is driven by the increased audit effort rather than a higher audit risk premium. Additionally, the positive impact of oil price uncertainty on audit fees is more pronounced for non-state-owned firms, firms with weaker corporate governance, and firms with greater earnings manipulation risks. Finally, our main finding remains robust for oil price uncertainty measured by Shanghai Crude Oil Futures and West Texas Intermediate.

Keywords: Oil price uncertainty; Audit fees; Audit effort (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:125:y:2023:i:c:s014098832300350x

DOI: 10.1016/j.eneco.2023.106852

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