{"title":"Regulatory intensity and audit fees","authors":"Hongkang Xu","doi":"10.1111/ijau.12362","DOIUrl":null,"url":null,"abstract":"This study employs the measurement of the cost of compliance with all federal paperwork regulations to examine the association between regulatory intensity and audit fees at the company level. Using a sample of US companies from 2003 to 2019, I find that regulatory intensity is positively associated with audit fees, suggesting that firms facing a heavier burden of regulatory compliance tend to incur higher audit fees. The findings are supported by various robustness tests. I also document a positive association between regulatory intensity and audit report lag. Moreover, I find that the positive relation between regulatory intensity and audit fees is more pronounced among firms in high‐litigation industries, which are typically subject to elevated litigation risks. This study contributes to the existing literature by providing new evidence on the relationship between regulatory intensity and audit fees, utilizing a novel and rigorous measure that captures the intensity of a broad range of regulations.","PeriodicalId":47092,"journal":{"name":"International Journal of Auditing","volume":null,"pages":null},"PeriodicalIF":2.1000,"publicationDate":"2024-06-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Journal of Auditing","FirstCategoryId":"91","ListUrlMain":"https://doi.org/10.1111/ijau.12362","RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
This study employs the measurement of the cost of compliance with all federal paperwork regulations to examine the association between regulatory intensity and audit fees at the company level. Using a sample of US companies from 2003 to 2019, I find that regulatory intensity is positively associated with audit fees, suggesting that firms facing a heavier burden of regulatory compliance tend to incur higher audit fees. The findings are supported by various robustness tests. I also document a positive association between regulatory intensity and audit report lag. Moreover, I find that the positive relation between regulatory intensity and audit fees is more pronounced among firms in high‐litigation industries, which are typically subject to elevated litigation risks. This study contributes to the existing literature by providing new evidence on the relationship between regulatory intensity and audit fees, utilizing a novel and rigorous measure that captures the intensity of a broad range of regulations.
期刊介绍：
In addition to communicating the results of original auditing research, the International Journal of Auditing also aims to advance knowledge in auditing by publishing critiques, thought leadership papers and literature reviews on specific aspects of auditing. The journal seeks to publish articles that have international appeal either due to the topic transcending national frontiers or due to the clear potential for readers to apply the results or ideas in their local environments. While articles must be methodologically and theoretically sound, any research orientation is acceptable. This means that papers may have an analytical and statistical, behavioural, economic and financial (including agency), sociological, critical, or historical basis. The editors consider articles for publication which fit into one or more of the following subject categories: • Financial statement audits • Public sector/governmental auditing • Internal auditing • Audit education and methods of teaching auditing (including case studies) • Audit aspects of corporate governance, including audit committees • Audit quality • Audit fees and related issues • Environmental, social and sustainability audits • Audit related ethical issues • Audit regulation • Independence issues • Legal liability and other legal issues • Auditing history • New and emerging audit and assurance issues
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