دانلود رایگان مقاله انگلیسی افشای عمومی حسابرسی و اختلاف میان مشتری و حسابرس - الزویر 2017

abstract

Available online xxxx Before the public disclosure of audit fees was mandated, it was unlikely for an audit client to have accurate information about how much other companies were charged by their auditors. Public fee disclosure decreases the cost of auditees' access to audit fee information for the auditor's portfolio of clients and is thus likely to increase the relative bargaining power of auditees over auditors when they negotiate audit fees. Using both proprietary and public audit fee data before and after public fee disclosure was mandated in China, we provide evidence consistent with the preceding conjecture. We find that public fee disclosure reinforces the magnitude of audit fee decreases for overcharged clients and weakens auditors' ability to raise audit fees for undercharged clients. These findings suggest the existence of unintended consequences of public fee disclosure regulation, the original rationale of which was a concern about audit pricing practices that could undermine auditor independence.

5. Conclusion

Using both private and public audit fee data in China, we provide further evidence that public fee disclosure directly affects audit fees. Specifically, we find that public fee disclosure reinforces downward fee adjustments for overcharged clients and weakens upward fee adjustments for undercharged clients. This is consistent with clients gaining more relative bargaining power than auditors after public fee disclosure. Our evidence suggests an unintended consequence of fee disclosure regulation and should be helpful in resolving the debate that arises when only public audit fee data are used to test the effect of public fee disclosure on audit fees (Francis and Wang, 2005; Mayhew, 2005).

Our extension of prior studies is based on audit fee data in China. As the Chinese public accounting profession was in its development stage during our sample period, potentially making it quite different from its counterparts in developed audit markets such as the U.S. (e.g., Chen, Chen, Lobo and Wang, 2011; DeFond, Wong and Li, 2000; Gul, Sami and Zhou, 2009), readers should exercise caution when generalizing our conclusion to settings beyond China.

Moreover, we acknowledge that an ideal test of the effect of public fee disclosure would involve difference-in-differences analysis, whereby pre- and post-disclosure changes in fees in China would be compared with a control sample (preferably one with an institutional background similar to that of China) that did not undergo similar regulatory change. Such a control sample is unfortunately not readily available.

Finally, as public fee disclosure weakens the ability of auditors to adjust audit fees upward for undercharged clients, further study may explore whether audit quality is compromised for such clients as an unintended consequence of public fee disclosure.