Dominant shareholders, excess control and audit fees in Canada

Yves Bozec and Richard Bozec

International Journal of Accounting and Finance, 2013, vol. 4, issue 2, 119-142

Abstract: Public firms throughout the world tend to be controlled by large shareholders who possess significant control rights in excess of their cash-flow rights (excess control). Extensive evidence suggests that concentrated ownership structures and excess control entail large agency costs. However, little is known about the impact of the presence of dominant shareholders on the pricing of audit fees. The objective of this paper is to address this issue. Using a panel of 242 S%P/TSX Canadian firms over the period 2002-2008, we document a positive association between excess control and audit fees while disentangling the effects of both ownership concentration and family ownership. We also document that excess control primarily impacts on audit fees over and above the effects of ownership concentration and/or family ownership. Furthermore, we find that the different sources of excess control, dual-class shares and pyramids, have different impact on audit fees.

Keywords: excess control; ownership concentration; dominant shareholders; agency costs; expropriation; family ownership; audit fees; Canada; dual-class shares; pyramids. (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.inderscience.com/link.php?id=57525 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ids:intjaf:v:4:y:2013:i:2:p:119-142

Access Statistics for this article

More articles in International Journal of Accounting and Finance from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().