Managing Economic Policy Uncertainty in Auditor Local Offices

Indrarini Laksmana, Amirali Moeini Chaghervand (), Rui-Zhong Zhang () and Shihui Fan ()
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Indrarini Laksmana: Ambassador Crawford College of Business and Entrepreneurship, Kent State University, Kent, OH, USA
Amirali Moeini Chaghervand: University of Houston-Downtown, Houston, TX, USA
Rui-Zhong Zhang: Ambassador Crawford College of Business and Entrepreneurship, Kent State University, Kent, OH, USA
Shihui Fan: Department of Accounting, School of Business, Central Connecticut State University, New Britain, CT, USA

Review of Pacific Basin Financial Markets and Policies (RPBFMP), 2025, vol. 28, issue 03, 1-27

Abstract: In this paper, we examine the association between economic policy uncertainty (EPU) and both audit fees and audit delay and whether certain characteristics of auditor local offices moderate these relationships. We find that auditors charge lower audit fees and have shorter audit delays during periods of high EPU than during periods of low EPU. Larger auditor offices and industry market leaders decrease audit fees and audit delay more than their counterparts when EPU is high. Auditors do not reduce audit fees for significant clients of a local office but increase audit effort as these clients experience longer audit delays when EPU is high.

Keywords: Audit fees; audit delay; auditor local offices; economic policy uncertainty (search for similar items in EconPapers)
JEL-codes: G18 M42 M48 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1142/S021909152550016X

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