The nuanced interplay between blockholders and audit fees: Empirical evidence from the UK alternative investment market

IF 3.7 Q1 BUSINESS, FINANCE

Journal of International Accounting Auditing and Taxation Pub Date : 2025-07-14 DOI:10.1016/j.intaccaudtax.2025.100712

Omar Alhamad , Sardar Ahmad , John Ziyang Zhang

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引用次数: 0

Abstract

This study investigates the effect of blockholders’ characteristics on audit fees by focusing on the Type II agency problem. Our study contributes to the debate on the interplay between blockholders’ characteristics and audit fees on a sample of smaller and medium-sized firms listed on the United Kingdom (UK)’s Alternative Investment Market (AIM). Using voting rights as a proxy for blockholders’ power, the findings of the study show that the presence and number of blockholders are positively associated with audit fees while voting dispersion is negatively associated with audit fees. Furthermore, the study provides evidence that the interplay between blockholders and external auditing is affected by coalition formation between blockholders and the largest controlling shareholder. Additional analysis reveals that if the first two and three largest blockholders are of the same type (such as all families or all corporations), then audit fees for those firms are higher than for firms where these blockholders are of a different type. In particular, the impact of blockholders on audit fees is more positive when firms are controlled by the holding of a family. Our findings have important implications for policymakers and audit practice regarding the interplay among external corporate governance mechanisms and institutional settings.

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大股东与审计费用之间微妙的相互作用：来自英国另类投资市场的经验证据

本文以第二类代理问题为研究对象，探讨了股东特征对审计费用的影响。本研究以在英国另类投资市场（AIM）上市的中小企业为样本，对股东特征与审计费用之间的相互作用进行了探讨。将表决权作为股东权力的代表，研究结果表明，股东的存在和数量与审计费用呈正相关，而投票权分散与审计费用呈负相关。此外，本研究还提供了证据，证明大股东与外部审计之间的相互作用受到大股东与最大控股股东之间联盟形成的影响。进一步的分析表明，如果前两个和三个最大的股东属于同一类型（例如所有家庭或所有公司），那么这些公司的审计费用高于这些股东属于不同类型的公司。特别是，当公司由家族控股时，大股东对审计费用的影响更为积极。我们的研究结果对于政策制定者和审计实践对于外部公司治理机制和制度设置之间的相互作用具有重要意义。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Journal of International Accounting Auditing and Taxation BUSINESS, FINANCE-

CiteScore

4.50

自引率

3.80%

发文量

期刊介绍： The Journal of International Accounting, Auditing and Taxation publishes articles which deal with most areas of international accounting including auditing, taxation and management accounting. The journal''s goal is to bridge the gap between academic researchers and practitioners by publishing papers that are relevant to the development of the field of accounting. Submissions are expected to make a contribution to the accounting literature, including as appropriate the international accounting literature typically found in JIAAT and other primary US-based international accounting journals as well as in leading European accounting journals. Applied research findings, critiques of current accounting practices and the measurement of their effects on business decisions, general purpose solutions to problems through models, and essays on world affairs which affect accounting practice are all within the scope of the journal.