Auditor Perception of Corporate Excess Cash Holdings: The French Evidence

Ghassen Allani (), Imen Ben Slimene () and Yves Mard ()
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Ghassen Allani: UPHF - Université Polytechnique Hauts-de-France, LARSH - Laboratoire de Recherche Sociétés & Humanités - UPHF - Université Polytechnique Hauts-de-France - INSA Hauts-De-France - INSA Institut National des Sciences Appliquées Hauts-de-France - INSA - Institut National des Sciences Appliquées
Imen Ben Slimene: CREGO - Centre de Recherche en Gestion des Organisations - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UB - Université de Bourgogne - UBFC - Université Bourgogne Franche-Comté [COMUE] - UFC - Université de Franche-Comté - UBFC - Université Bourgogne Franche-Comté [COMUE], Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar
Yves Mard: CRCGM - Centre de Recherche Clermontois en Gestion et Management - UdA - Université d'Auvergne - Clermont-Ferrand I - ESC Clermont-Ferrand - École Supérieure de Commerce (ESC) - Clermont-Ferrand

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Abstract: The audit literature highlights the influence of the context on the relationship between excess cash and audit fees (Gleason et al., 2017; Kuo et al., 2022). We study this relationship in the French context, which presents several specificities regarding corporate governance and audit regulation. The empirical study conducted on an initial sample of 1411 observations of French-listed firms over the period [2008- 2018] shows that excess cash is associated with lower audit fees. However, this relationship no longer holds for firms whose accounting and financial decisions may seem contradictory to holding excess cash. These results complement previous research and show an intermediate situation between those described in the American and Chinese contexts. French auditors generally look favorably on excess cash, but their perception can change, charging extra fees in circumstances where holding excess cash may seem suboptimal.

Keywords: Excess cash holdings; Audit fees (search for similar items in EconPapers)
Date: 2024-05-29
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Published in 45ème Congrès de l’Association Francophone de Comptabilité, Université de Bourgogne, May 2024, Dijon (Bourgogne), France

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04606201

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