How audit fees are affected by a client under SEC investigation

Q4 Economics, Econometrics and Finance

International Journal of Accounting, Auditing and Performance Evaluation Pub Date : 2014-04-01 DOI:10.1504/IJAAPE.2014.060209

Winifred D. Scott, Willie. E. Gist

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引用次数: 1

Abstract

We examine the effect of a US Securities and Exchange Commission (SEC) investigation of the audit client on audit cost. Ordinary least-squares models along with a match-paired design and publicly available auditor fees data are used to analyse the relation between an SEC investigation event and audit fees. The finding of a positive and significant relation supports our hypothesis that the business risk of a client under investigation by this regulatory agency is perceived to be higher than that of a client not under investigation. This finding is important given that certain factors may work against observing an effect. This study contributes to the literature by determining that auditors charge a statistically and economically significant average audit fees premium that ranges from 49.9% to 56.2% to clients under SEC investigation. One implication is that client management has fee-related incentives to avoid regulatory misconduct/scrutiny and produce financial statements free of material misstatement.

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被SEC调查的客户对审计费用有何影响

我们研究了美国证券交易委员会(SEC)对审计客户的调查对审计成本的影响。使用普通最小二乘模型以及配对设计和公开可用的审计师费用数据来分析SEC调查事件与审计费用之间的关系。这一发现支持了我们的假设，即被该监管机构调查的客户的业务风险被认为高于未被调查的客户。这一发现很重要，因为某些因素可能不利于观察到效果。本研究通过确定审计师向SEC调查下的客户收取49.9%至56.2%的统计和经济上显著的平均审计费用溢价，为文献做出了贡献。一个暗示是，客户管理有与费用相关的动机，以避免监管不当行为/审查，并产生没有重大错报的财务报表。

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

International Journal of Accounting, Auditing and Performance Evaluation Economics, Econometrics and Finance-Finance

CiteScore

0.70

自引率

0.00%

发文量

期刊介绍： IJAAPE publishes original scholarly papers across the whole spectrum of: financial accounting, managerial accounting, accounting education, auditing, taxation, public sector accounting, capital market and accounting, accounting information systems, performance evaluation, corporate governance, ethics, and financial management. All methodologies, such as analytical, empirical, behavioural, surveys, and case studies are welcome. IJAAPE encourages contributions especially from emerging markets and economies in transition and studies whose results are applicable across nation states or capable of being adapted to the different accounting and business environments.