Different tenure phases of executives and audit fees

IF 3.6 Q1 BUSINESS, FINANCE
Rachana Kalelkar, Qiao Xu
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引用次数: 1

Abstract

Purpose The authors investigate whether the different tenure phases of executives have a differential effect on audit pricing. Two alternate views – career concern and power – can explain the effect of executives’ tenure on audit pricing. This paper aims to determine, which viewpoint dominates in explaining the relationship between audit pricing and executive tenure phases. Design/methodology/approach Using a sample of 11,198 firm-year observations from 2007 to 2016, the authors adopt an ordinary least squares regression model to assess the impact of the middle and long phases of executives’ tenure on audit fees. Findings Audit fees are significantly lower when executives enter the middle and long phases of tenure. The reduction in audit fees is greatest as both chief executive officers and chief financial officers enter the long tenure phase. Although audit fees gradually decrease as executive tenure is extended, they start increasing two years before the end of executive tenure. Furthermore, the negative association between the executive tenure phase and audit fees is greater when the executive is appointed externally. Finally, the long phase of executive tenure also mitigates the positive relationship between audit fees and internal control weaknesses. Research limitations/implications This study is based on US data. Future research may extend this study to other countries. Practical implications The findings are important to firms, practitioners and academicians, particularly, as the length of tenure of top executives has increased in recent years. By documenting that executives’ middle and long tenure phases reduce audit fees, the findings highlight the importance of maintaining executives in the firm. Finally, the findings have implications for investors, policymakers and auditors to identify companies with high audit risk. Originality/value This study is the first to document the impact of executives’ middle and long tenure phases on audit fees.
高管的不同任期阶段和审计费用
目的研究高管不同任期阶段对审计定价的影响是否存在差异。两种不同的观点——职业关注和权力——可以解释高管任期对审计定价的影响。本文旨在确定哪种观点在解释审计定价与高管任期阶段之间的关系时占主导地位。设计/方法/方法使用2007年至2016年11198个公司年度的观察样本,作者采用普通最小二乘回归模型来评估高管任期的中长期阶段对审计费用的影响。发现当高管进入任期的中长期阶段时,审计费用会显著降低。随着首席执行官和首席财务官进入长期任职阶段,审计费用的减少幅度最大。尽管审计费用随着高管任期的延长而逐渐减少,但在高管任期结束前两年开始增加。此外,当高管由外部任命时,高管任期阶段与审计费用之间的负相关更大。最后,高管任期较长也缓解了审计费用与内部控制薄弱环节之间的积极关系。研究局限性/含义本研究基于美国数据。未来的研究可能会将这项研究扩展到其他国家。实际含义这一发现对企业、从业者和学者都很重要,尤其是近年来高管任期的延长。通过记录高管的中长期任期阶段降低了审计费用,调查结果突显了留住高管在公司的重要性。最后,研究结果对投资者、政策制定者和审计师识别审计风险高的公司具有启示意义。原创性/价值本研究首次记录了高管中长期任职阶段对审计费用的影响。
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
CiteScore
4.30
自引率
0.00%
发文量
18
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