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The risk of premium of audit fee: Evidence from the 2008 financial crisis/ Tianshu Zhang

By: Contributor(s): Material type: TextTextSeries: China Journal of Accounting Studies ; Volume 1 , number 1 ,Taylor and Francis: Oxon, 2013Content type:
  • text
Media type:
  • unmediated
Carrier type:
  • volume
ISSN:
  • 2169-7221
Subject(s): Online resources: Summary: This paper uses the 2008 financial crisis to examine the association between audit pricing and firm risk. The empirical analysis shows that when firm risk increased during the crisis, accounting firms charged more for their auditing services, supporting the risk premium of audit fee. An analysis of different industries presents a positive correlation between the audit fees and firm risk for export companies that were seriously shocked by the crisis. Further, compared with private firms, the audit fees of State-Owned Enterprises (SOEs) did not increase with firm risk under the crisis, due to the government’s bailout guarantee. Finally, the risk premium of audit fee was only found for companies audited by non-Big Four accounting firms.
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Item type Current library Call number Vol info Copy number Status Notes Date due Barcode
Journal Article Journal Article Main Library - Special Collections HF5601 CHI (Browse shelf(Opens below)) Vol 1, No 1 pages 47-62 SP17843 Not for loan For In-house use only

This paper uses the 2008 financial crisis to examine the association between audit pricing and firm risk. The empirical analysis shows that when firm risk increased during the crisis, accounting firms charged more for their auditing services, supporting the risk premium of audit fee. An analysis of different industries presents a positive correlation between the audit fees and firm risk for export companies that were seriously shocked by the crisis. Further, compared with private firms, the audit fees of State-Owned Enterprises (SOEs) did not increase with firm risk under the crisis, due to the government’s bailout guarantee. Finally, the risk premium of audit fee was only found for companies audited by non-Big Four accounting firms.

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