Public Audit Oversight and Audit Pricing
Evidence from the EU
Bibliographic Data
| ID | 19447469 |
|---|---|
| Authors | Annita Florou (0000-0002-1995-7713, Bocconi University, corresponding author), Shuai Yuan (0009-0005-7442-9592, University of Nottingham Ningbo China, Ningbo, People’s Republic of China) |
| Year | 2024 |
| Volume | 33 |
| Issue | 3 |
| Pages | 1105-1137 |
| Publication date | 2024-05-26 |
| Peer Reviewed | Yes |
| Open Access | No |
| Type | ARTICLE |
| Venue | European Accounting Review (JOURNAL) |
| Journal identifiers | ISSN: 0963-8180 • E-ISSN: 1468-4497 |
| Publisher | Informa UK Limited (PUBLISHER • GB) |
| DOI | 10.1080/09638180.2022.2145981 |
| OpenAlex | W4311920642 |
| Language | EN |
| References cited | 33 |
We examine the audit pricing consequences of auditor inspections under the public oversight regime in the EU. Employing a staggered differences-in-differences design, we document an inspections audit fee increase during the post-inspection period when companies’ auditors are subject to inspections by the national Public Oversight Body (POB). However, this effect masks significant cross-sectional variation. Specifically, we find that the increase in audit fees attributable to inspections is concentrated among POBs with more adequate human resources, where inspections last longer or occur both at the auditor’s and the regulator’s premises. Also, the effect of inspections on audit fees is evident only when the POB prohibits inspectors from joining an audit firm immediately after their departure or when the oversight system is funded by multiple stakeholders. Overall, our findings suggest that audit costs as reflected in audit fees increase for clients of inspected auditors but only when inspections are more laborious, independent, and rigorous
Audit · Business · Auditing, Earnings Management, Governance · Corporate Taxation and Avoidance · Fiscal Policies and Political Economy · Accounting
| Citation velocity | historical |
|---|---|
| Highly cited | No |