Please use this identifier to cite or link to this item: http://hdl.handle.net/10397/43388
Title: Product market competition and audit fees
Authors: Wang, Y
Chui, ACW 
Keywords: Audit fees
Audit risk
Business risk
Earnings management
Product market competition
Issue Date: 2015
Publisher: American Accounting Association
Source: Auditing, 2015, v. 34, no. 4, p. 139-156 How to cite?
Journal: Auditing 
Abstract: Existing theories posit two contradictory predictions on the relation between product market competition and audit fees. On the one hand, product market competition can mitigate agency problems between shareholders and managers and increase the accuracy of financial reporting, thus decreasing auditors’ assessments of audit risk. Hence, auditors tend to charge lower fees to firms in a more competitive industry. On the other hand, product market competition can increase auditors’ assessments of business risk. Therefore, audit fees are expected to increase with industry competitiveness. This study empirically tests the relation between product market competition and audit fees and finds that auditors charge more to firms in a more competitive industry.
URI: http://hdl.handle.net/10397/43388
ISSN: 0278-0380
DOI: 10.2308/ajpt-51014
Appears in Collections:Journal/Magazine Article

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