Association between executives’ foreign background and audit fees
Review of Accounting and Finance
ISSN: 1475-7702
Article publication date: 20 December 2023
Issue publication date: 3 April 2024
Abstract
Purpose
This study aims to investigate the association between executives with foreign backgrounds and the audit fees paid by the Chinese-listed firms over the period from 2010 to 2020.
Design/methodology/approach
To examine the association between executives’ foreign experience and audit fees, this study constructs the following empirical model: Lnfeei,t = β0 + β1Foreign backgroundi,t + ∑βj Controli,t + YearFE + IndFE + εi,t (1).
Findings
This study finds that auditors charge higher fees for firms hiring more executives with foreign backgrounds. The results are robust to a battery of robustness checks, including fixed effects, alternative measures of independent variable, controlling for other characteristics of executives and auditors and entropy balancing method.
Originality/value
This study sheds light on how executives’ foreign backgrounds affect audit fees, enriching the literature on executive heterogeneity and audit fees and providing important implications for audit practitioners.
Keywords
Acknowledgements
Declaration of Interest Statement: All authors declare that No conflict of interest exists.
Data Availability Statement: The data supporting this study’s findings are available from the corresponding author upon reasonable request.
Funding information: Zhejiang Office of Philosophy and Social Science, Grant Number: 23NDJC154YB. Study on the Course Module Design and Teaching Model Reform for Training Excellent Accounting Talents under the Convergence of ‘Dual Carbon’ Goals and ‘Digital Economy’—a Graduate Teaching Reform Project of the Zhejiang Province’s 14th Five-Year Plan. General Research Project of Zhejiang Provincial Department of Education (No. 2023-005) and the Zhejiang Graduate Education Society (No. 2023-005).
Citation
Su, W. and Yin, C. (2024), "Association between executives’ foreign background and audit fees", Review of Accounting and Finance, Vol. 23 No. 2, pp. 186-204. https://doi.org/10.1108/RAF-12-2022-0330
Publisher
:Emerald Publishing Limited
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