Related Party Transactions and Audit Fees: Evidence from China

2015 ◽  
Author(s):  
Ahsan Habib ◽  
Haiyan Jiang ◽  
Donghua Zhou
Keyword(s):  
Audit Fees ◽  
Related Party Transactions

scholarly journals Related Party Transaction Berpengaruh Terhadap Biaya Audit

2020 ◽  
Vol 4 (1) ◽  
pp. 1-11
Author(s):  
Senato Erasandi
Keyword(s):  
Regression Analysis ◽  
High Risk ◽  
Multiple Regression Analysis ◽  
Multiple Regression ◽  
Stock Exchange ◽  
Audit Fees ◽  
Analysis Model ◽  
Related Party Transactions ◽  
Related Party Transaction

The purpose of this study is to analyze the effect of related party transactions on audit fees. This study uses 67 samples listed on the Indonesia Stock Exchange for the period 2017 to 2018. The analysis used in this study is the Multiple Regression analysis model that is processed with SPSS 20 software. This study found that related party transactions were positively and significantly related to audit fees. The results show that related party transactions can cause the company to have a high risk so that it can increase the audit fees paid by the company

Related-Party Transactions and Audit Fees: Evidence from China

2015 ◽  
Vol 14 (1) ◽  
pp. 59-83 ◽  
Author(s):  
Ahsan Habib ◽  
Haiyan Jiang ◽  
Donghua Zhou
Keyword(s):  
Market Competition ◽  
Positive Association ◽  
Audit Fees ◽  
Third Party ◽  
Audit Risk ◽  
Accounting Data ◽  
Related Party Transactions ◽  
Goods And Services ◽  
Baseline Case ◽  
Representational Faithfulness

ABSTRACT This paper investigates the effect of related-party transactions (RPTs) on audit fees in China. RPTs may violate the arm's-length assumption of regular market-based transactions, impairing the representational faithfulness and verifiability of accounting data and, as a consequence, increase clients' auditor-assessed business risk. The presence and magnitude of such transactions are therefore likely to increase audit fees. On the other hand, audit fees could be lower for firms with RPTs because auditors face less difficulty in verifying them, as opposed to third-party transactions. We first consider the effect of RPTs on audit fees, and document relatively high audit fees associated with RPTs. This lends support to the conjecture that RPTs are seen as increasing audit risk. We then extend this baseline case by considering the effects on audit fees of different classes of RPTs, of the different parties involved in RPTs and, finally, of the interaction between product-market competition and RPTs. We first document a negative (positive) association between RPTs involving sales and purchase of goods and services (RPTs related to intercorporate loans). We also find that audit fees are relatively high for RPTs involving loans and capital transfers when listed parents transact with their subsidiaries. Finally, we find that audit fees are relatively low for RPTs within competitive industries.

scholarly journals Related-Party Transactions and Audit Fees

2021 ◽  
Vol 5 (2) ◽  
pp. 31
Author(s):  
Fortuna Oktavia Perwita ◽  
Iman Harymawan
Keyword(s):  
Stock Exchange ◽  
Audit Fees ◽  
Least Square ◽  
Analysis Model ◽  
Industry Specialization ◽  
Related Party Transactions ◽  
Ordinary Least Square ◽  
Market Shares ◽  
Analysis Technique ◽  
Ordinary Least Square Regression

This research aims to analyze the association between the related-party transactions and audit fees. This study used 781 observations listed on the Indonesia Stock Exchange from 2010 to 2017. The analysis technique used in this research was the Ordinary Least Square Regression analysis model processed with STATA 14.0 software.  This study found that related-party transactions are positively and significantly related to audit fees. The result indicated that the related-party transactions increase audit fees paid by companies. It also investigated the moderating effect of industry specialty auditors. This indicated that auditor specialization strengthened the relationship between the related-party transactions and audit fees. The market share proxy was used to measure industry specialization. However, this proxy still has disadvantages as it can generate different market shares. This study found that related-party transactions increased audit fees. The results of this study can be used as consideration in making decisions for related parties.

Parent-Subsidiary Investment Layers and Audit Fees

2017 ◽  
Vol 33 (4) ◽  
pp. 555-579 ◽  
Author(s):  
Ferdinand A. Gul ◽  
Audrey Wen-hsin Hsu ◽  
Sophia Hsin-Tsai Liu
Keyword(s):  
Positive Association ◽  
Audit Fees ◽  
Parent Company ◽  
Publicly Traded ◽  
Related Party Transactions ◽  
Number Of Layers ◽  
Tax Haven

This study investigates whether the number of investment layers within a parent-subsidiary consolidated group is associated with a firm’s audit fees. Using a unique sample of publicly traded Taiwan companies, which are required to disclose information on all of their affiliates, we measure the number of vertical layers in the parent-subsidiary relationship, from the parent company to the lowest-tiered subsidiary. Our results show a positive association between audit fees and the number of investment layers. In addition, we find that the positive association between audit fees and the number of layers becomes stronger for firms which have more investees located in tax haven countries. Our results also show that the positive association between audit fees and the number of investment layers is more pronounced as companies’ engagement in related-party transactions increases. Overall, the results support the argument that auditors attach higher audit risks to firms with more investment layers and therefore charge higher audit fees.

scholarly journals Related party transactions and audit fees: the role of the internal audit function

2017 ◽  
Vol 22 (1) ◽  
pp. 187-212 ◽  
Author(s):  
Redhwan Ahmed Al-Dhamari ◽  
Bakr Al-Gamrh ◽  
Ku Nor Izah Ku Ismail ◽  
Samihah Saad Haji Ismail
Keyword(s):  
Internal Audit ◽  
Audit Fees ◽  
Related Party Transactions ◽  
Internal Audit Function

The Conditional Effects of Abnormal Audit Fees on Audit Quality

2020 ◽  
Vol 45 (4) ◽  
pp. 291-332
Author(s):  
Kyung Soon Kim ◽  
Seun Young Park ◽  
Jin Hwon Lee
Keyword(s):  
Audit Quality ◽  
Audit Fees ◽  
Conditional Effects
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