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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.

To examine the association between executives’ foreign experience and audit fees, this study constructs the following empirical model: Lnfee_i,t = β₀ + β₁Foreign background_i,t + ∑β_j Control_i,t + YearFE + IndFE + ε_i,t (1).

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.

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.

This paper aims to examine the effect of carbon emissions on audit fees. The authors hypothesize that firms in cities with higher carbon emission levels have lower reporting transparency, higher return volatility or are subject to higher reputation risk, causing them to be charged higher audit fees for auditing services.

The authors use panel data of 25,960 firm-year observations from a sample of Chinese firms. The carbon emission data for each Chinese city are obtained from the China Emission Accounts and Datasets for Emerging Economies. This paper adopts a multiple regression model to study the impact of carbon emissions on audit fees.

The authors find that firms located in cities with higher carbon emission levels and firms with more carbon emissions are charged, on average, a higher audit fee. This audit fee effect of carbon risk is transmitted by lessened information transparency and elevated financial risk within these firms. This paper shows that auditors consider carbon risk in their audit fee decisions and other factors that could influence audit risk and effort.

This study draws a connection between carbon emissions and audit fees. It is especially relevant due to the increasing importance of environmental factors in the audit risk assessment. In addition, the findings suggest that a firm implementing a proactive environmental strategy benefits the economy and decreases the costs to the firm for services such as auditing.

This study aims to examine how woman leadership (i.e., woman board chairperson, woman chief executive officer (CEO) and board gender diversity) affects audit fee and also ascertained the interactive effect of woman leadership and gender diversity on audit committee on audit fee.

The study applied ordinary least square and fixed-effect estimators on the data of 21 universal banks in Ghana for the period 2010–2021 to estimate the empirical results.

It is revealed that under the leadership of women (woman CEO and board gender diversity), higher external audit quality is ensured as higher audit fee is paid. Interestingly, it was found that with the presence of women on the audit committee, the integrity of internal controls and internal audit procedures are enhanced, which leads to quality financial reporting, calls for lower audit effort, hence lower audit fee.

The result indicates that firms can rely on the leadership of women in ensuring quality external audit and quality financial reporting, which ultimately helps to minimize the information risk to all stakeholders.

The paper contributes to extant literature by establishing that, under the leadership of women in banking entities from a developing country context, external audit quality and financial reporting are achieved.

This research aims to revisit Gul and Goodwin (2010), which focuses on exploring the relationship between debt maturity structure, credit ratings and audit fees. Furthermore, the authors investigate whether this association varies based on firm size, firm life cycle and financial reporting quality.

To investigate the research question, the authors use an extended sample period, 2004–2017, in comparison to the sample period, 2003–2006, used in Gul and Goodwin (2010). The authors use ordinary least squares regression as a baseline methodology along with two-stage least-squares regression and change analysis to control for endogeneity concerns.

According to Gul and Goodwin (2010), auditors charge lower audit fees for firms with higher short-maturity debt and better credit ratings, indicating a lower likelihood of financial misreporting. Further, Gul and Goodwin (2010) find that lower credit rated firms benefit more from short-term debt. Primarily, the findings are consistent with Gul and Goodwin (2010) and provide further evidence that the beneficial effects of short-maturity debt for firms with poor ratings are evident for small firms, firms in the growth stage of their life cycle and firms with poor earnings quality.

The findings imply that practitioners in the audit profession and investors should take a more nuanced and comprehensive approach to varied firm and financial factors, taking into consideration the intricate relationships between many elements impacting a firm’s financial health. As a result, audit professionals may give more accurate appraisals of a firm’s financial condition, and investors can make better investment decisions.

The authors reconfirm the findings of Gul and Goodwin (2010) using an extended sample. The findings are novel, which evidence that the lower audit fees for rated firms with short-maturity debt are moderated by firm size, life cycle and financial reporting quality.

Building upon multiple theories (i.e. agency, signalling and human capital), this paper aims to explore the effects of directors’ education on audit fees and to assess the mediating role of audit committee (AC).

The authors use an econometric analysis of Italian-listed non-financial firms during the period 2012–2015 using single-mediator models through ordinary least squares and logit regressions. Moreover, the authors apply the path analysis with the bootstrap method to test the mediating effect.

Findings show that the directors’ level of education improves audit fees. Additionally, the presence of an AC and the financial expertise of its members mediate this relationship.

By offering insights into the implications for audit pricing of the board and AC human capital, the paper helps regulators and policy-makers to understand which characteristic of such governance bodies improves auditing quality and the provision of better financial reporting.

The study uses a unique data set hand-collected from multiple sources and advances the auditing literature by shedding light on the reasons behind the influence of directors’ characteristics on audit fees and on the role played by the AC.

This study aims to examine the effect of family ownership on audit fees and whether political connections moderate the causal relationship. Indonesia, as emerging countries, arguably offers appropriate research setting for this research because most Indonesian firms are family owned and exhibit weak investor protection. The authors predict that family ownership positively affects audit fees, and political connections strengthen this influence.

This study uses 98 listed manufacturing firms on Indonesia Stock Exchange (IDX) in 2018–2020, resulting in 279 firm-year observations. Panel data regression used to test the hypothesis. Family ownership is divided into direct and indirect ownership while audit fees are measured by the natural logarithm of audit fees paid by the firms.

The results show that the greater total and direct family ownerships imply lower audit fees, while indirect family ownership does not affect audit fees. The finding is contrary to the alleged hypothesis. Further, political connections only strengthen direct family ownership's negative impact on audit fees.

This study's findings support the alignment effect hypothesis arguing that controlling shareholders, in this case, families, align their interests with non-controlling shareholders. These findings provide a different perspective from various empirical studies conducted in Asian countries where the majority of companies are also controlled.

This paper investigates whether the audit fees of Chinese listed firms are associated with the share pledging practice of the firm’s controlling shareholders.

This study uses the audit pricing model to estimate the association between the share pledging of listed firms and audit fees. Cross-sectional analysis is conducted on a large sample of Chinese listed firms during the period 2004 to 2019. The authors further test the moderating effects of listing on the Main Board, state ownership and abnormal audit report lag on the association between share pledging and audit fees. The results remain robust to various endogeneity tests including two-stage least squares instrumental variable analysis, entropy balancing analysis and difference-in-difference analysis.

The study finds that audit fees are positively associated with the proportion of shares pledged by the listed firm’s controlling shareholder in China. The results also provide new evidence that the positive association between audit fees and the share pledging of controlling shareholders could be mitigated if the firm is listed on the Main Board and/or it is a state-owned enterprise. In contrast, pledged firms with abnormal audit report lag are found to have higher audit fees than their pledged counterparts without the excessively long audit delay.

Findings of this study have important practical implications to those charged with governance, as boards need to comprehensively understand the adverse consequences of share pledging when pursuing it as the firm’s major source of financing. The study also has policy implications for stock market regulators such as the China Securities Regulatory Commission in China. Regulators could consider developing a threshold-based share pledging disclosure and pledge ratio requirements based on factors such as a firm’s listing status and ownership structure.

This study provides new evidence on the audit-related consequences of share pledging in a significant capital market. Findings of this study also enrich the existing audit literature by introducing the share pledging activities of controlling shareholders into the audit pricing decision-making model.

Audit hour reporting is rare internationally. Thus, to what extent shareholders have the power to influence audit effort/hour demand is a question left unanswered. This study aims to use unique South Korean data to determine whether the increasing power of the largest foreign/domestic shareholders and blockholders can influence audit hour demand.

In this study ordinary least squares (OLS) regression analysis is conducted using a sample of Korean listed firms over the 2004–2018 sample period.

The results show: as the percentage equity holding of the largest foreign shareholder and blockholder (>5%) increases, audit hour demand increases. As the shareholding of the largest domestic shareholder increases, audit hour demanded decreases. The association between audit fees/hours is not qualitatively indifferent, after controlling for the audit fee premium effect. Furthermore, the largest foreign shareholder is shown to demand increasingly higher levels of audit hours from Big4 auditors, relative to NonBig4. All results are consistent with audit demand theory.

Whilst previous studies offer audit fee/risk interpretations, this study extends the literature by developing a framework to explain why audit hour demands differ for specific groups. Because audit hour information is rare internationally, the study has important policy implications.

This study aims to investigate the presence of the audit partner ethnicity on audit fees within the Indonesian context.

The sample consists of 803 firm-year observations from the Indonesia Stock Exchange during the period of 2014–2018. The study uses fixed-effect regression analysis to examine the relationship between audit partner ethnicity and audit fees.

This study reveals that firms audited by audit partners from the main ethnic group demonstrate lower audit fees, indicating a more extensive audit business network for this particular group of auditors compared to those from minority ethnic groups. Particularly, the study finds that firms audited by audit partners from the three largest ethnicities, namely, Balinese, Javanese and West Sumatranese, are associated with lower audit fees compared to others. These findings further contribute to the existing narrative and literature that highlight the ethnic background of audit partners as a form of social capital that influences lower audit fees.

This study provides valuable practical and academic implications regarding the impact of audit partner ethnicity on audit fees. The findings highlight the importance for audit firms to strive for a balanced representation of ethnic diversity in their auditor characteristics, as it can positively influence both governance and marketing strategies. By recognizing and addressing the significance of ethnic diversity among audit partners, firms can enhance their overall effectiveness and success in the auditing profession.

This study makes a unique contribution by providing empirical data on audit pricing theory in Indonesia, specifically focusing on the role of ethnic diversity as a determinant of audit pricing. Previous research has not extensively explored the connection between auditor ethnicity and audit fees, particularly in relation to the business network as a channel mechanism. The theoretical explanations for the fee differentials have also been limited in prior studies. The current study addresses this gap by offering a theoretical basis that highlights the advantage of the dominant ethnic group in establishing an efficient audit market system. Consequently, these auditors are able to charge lower fees to clients without compromising on the quality of their services. This finding aligns with the existing literature on audit fees and underscores the importance of the main ethnic group in fostering an effective audit market, resulting in lower audit fees compared to mixed audit markets.

Existing studies have shown that all kinds of audit risks greatly affect audit pricing for accounting firms. However, it is still unclear whether environmental risks caused by environmental violations lead to a high audit fee. This study aims to investigate whether accounting firms raise audit fees after client firms have violated environmental regulations or have been punished for such violations.

This study selects listed firms with environmental violations between 1994 and 2018 as the treatment sample and match the treatment group with a control group of firms from the same industry, of similar asset size and with no environmental violations for the same time period. Then, this study constructs a difference-in-difference (DID) model to explore the impact of firm environmental violations (or punishment for environmental violations) on the audit pricing.

This study finds that accounting firms tend to raise audit fees after client firms have violated environmental regulations or have been punished for such violations, and this increasing effect is different due to environmental regulation intensity, regional span and internal control defects. Further evidences show that environmental violations influence audit fees through financial restatement, whereas environmental punishments impact audit fees through earnings management and risk-taking.

This study enriches the literature on determining factors of audit fees and economic consequences of environmental violations and provides empirical supports to understand the pricing behavior of accounting firms.