The empirical relationship between ownership characteristics and audit fees

被引：104

作者：

Mitra S. ^{[1
]}

Hossain M. ^{[2
]}

Deis D.R. ^{[3
]}

机构：

[1] Department of Accounting, School of Business Administration, Wayne State University, Detroit

[2] Department of Accounting, Fogelman College of Business, University of Memphis, Memphis, TN

[3] Ennis and Virginia Joslin Department of Accounting, College of Business, Texas A and M University at Corpus Christi, Corpus Christi, TX 78412

来源：

Review of Quantitative Finance and Accounting | 2007年 / 28卷 / 3期

关键词：

Agency problem; Audit fees; Corporate Governance; Diffused institutional stock ownership; Institutional and noninstitutional blockholder ownership; Managerial stock ownership;

D O I：

10.1007/s11156-006-0014-7

中图分类号：

学科分类号：

摘要：

The present study examines the empirical relationship between ownership characteristics and audit fees. The basic premise is that the level of ownership sophistication and the extent to which ownership is large and substantial impact the effectiveness of stockholder monitoring on corporate affairs including the financial reporting process. Furthermore, high managerial ownership firms may experience a decline in agency problems in financial reporting due to a decrease in managerial propensity to misreport financial results. By employing a cross-sectional least squares regression analysis for a sample of 358 New York Stock Exchange-listed firms audited by the Big Five auditors, we find evidence of a significantly positive relationship between diffused institutional stock ownership (i.e., having less than 5% individual shareholding) and audit fees, and a significantly negative relationship between institutional blockholder ownership (i.e., having 5% or more individual shareholding) and audit fees. Finally, we document that managerial stock ownership is negatively associated with audit fees. We do not, however, find evidence of any relationship between noninstitutional blockholder ownership (with at least 5% individual stock ownership) and audit fees. The study's main results hold in various specification tests including when the effects of board-related and audit committee variables are factored in the analysis. Based on the observed relationship between the ownership variables and audit fees, we suggest that the ownership characteristics of a firm as a part of its governance mechanism constitute an important determinant of audit fees. © Springer Science+Business Media, LLC 2007.

引用

页码：257 / 285

页数：28

共 68 条

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