Board reforms and audit fees: international evidence

Yuan Huang, Xiao Li and Zilong Song

Asia-Pacific Journal of Accounting & Economics, 2022, vol. 29, issue 5, 1227-1246

Abstract: With a difference-in-differences approach, we find that world-wide reforms result in higher audit fees for reform firms. And this is specially so for reforms involving components of director independence and/or audit committee and auditor independence, adopting the rule-based approach, and implemented in countries with weaker institutional quality. Further analysis reveals that the increase in audit fees is driven by the increase in auditors’ efforts and auditees’ litigation risk, while the improved financial reporting quality has a negative effect on audit fees. Overall, our study examines one compliance cost, as well as its variations, of the board reforms.

Date: 2022
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DOI: 10.1080/16081625.2020.1870510

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Asia-Pacific Journal of Accounting & Economics is currently edited by Yin-Wong Cheung, Hong Hwang, Jeong-Bon Kim, Shu-Hsing Li and Suresh Radhakrishnan

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