Auditors’ response to family succession: evidence from China

Tzu-Ching Weng, Hsin-Yi Chi and Huan-Yi Li

Asia-Pacific Journal of Accounting & Economics, 2023, vol. 30, issue 1, 247-265

Abstract: This study examines the association between family succession and audit pricing. Auditors are interested in the successor’s capability, and they are incentivized to include this information in their audit pricing. A unique manually gathered dataset from China shows higher audit fees paid by second-generation family firms. However, compared with top-tier auditors, non-top-tier auditors charge lower audit fees to retain their engagement with family successors. Furthermore, auditors are more sensitive to successors’ personality characteristics, such as overseas education, business-related bachelor’s degree, business career experience, political connections, and succession age.

Date: 2023
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DOI: 10.1080/16081625.2021.2020670

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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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