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Article: Cross-listing audit fee premiums: Theory and evidence

TitleCross-listing audit fee premiums: Theory and evidence
Authors
KeywordsAudit fee
Audit quality
Cross-listing
Legal regime
Issue Date2009
PublisherAmerican Accounting Association. The Journal's web site is located at http://aaapubs.aip.org/accr/
Citation
Accounting Review, 2009, v. 84 n. 5, p. 1429-1463 How to Cite?
AbstractWe study the effects of cross-listings on audit fees. We first develop a model in which legal environments play a crucial role in determining the auditor's legal liability. Our model and analysis predict that auditors charge higher fees for firms that are cross-listed in countries with stronger legal regimes than they do for non-crosslisted firms and that the cross-listing audit fee premium increases with the difference in the strength of legal regimes between the cross-listed foreign country and the home country. We then empirically test these predictions. The results of our cross-country regressions strongly support our predictions. In addition, we find no significant crosslisting fee premium for firms that are cross-listed in countries whose legal regimes are no stronger than those of their home countries. This suggests that cross-listing audit fee premiums are associated with increased legal liability and not with increased audit complexity per se. Our findings help explain why cross-listing premiums occur and what determines their magnitude.
Persistent Identifierhttp://hdl.handle.net/10722/125580
ISSN
2015 Impact Factor: 1.953
2015 SCImago Journal Rankings: 4.478
ISI Accession Number ID
References

 

DC FieldValueLanguage
dc.contributor.authorChoi, JHen_HK
dc.contributor.authorKim, JBen_HK
dc.contributor.authorLiu, Xen_HK
dc.contributor.authorSimunic, DAen_HK
dc.date.accessioned2010-10-31T11:39:33Z-
dc.date.available2010-10-31T11:39:33Z-
dc.date.issued2009en_HK
dc.identifier.citationAccounting Review, 2009, v. 84 n. 5, p. 1429-1463en_HK
dc.identifier.issn0001-4826en_HK
dc.identifier.urihttp://hdl.handle.net/10722/125580-
dc.description.abstractWe study the effects of cross-listings on audit fees. We first develop a model in which legal environments play a crucial role in determining the auditor's legal liability. Our model and analysis predict that auditors charge higher fees for firms that are cross-listed in countries with stronger legal regimes than they do for non-crosslisted firms and that the cross-listing audit fee premium increases with the difference in the strength of legal regimes between the cross-listed foreign country and the home country. We then empirically test these predictions. The results of our cross-country regressions strongly support our predictions. In addition, we find no significant crosslisting fee premium for firms that are cross-listed in countries whose legal regimes are no stronger than those of their home countries. This suggests that cross-listing audit fee premiums are associated with increased legal liability and not with increased audit complexity per se. Our findings help explain why cross-listing premiums occur and what determines their magnitude.en_HK
dc.languageengen_HK
dc.publisherAmerican Accounting Association. The Journal's web site is located at http://aaapubs.aip.org/accr/en_HK
dc.relation.ispartofAccounting Reviewen_HK
dc.subjectAudit feeen_HK
dc.subjectAudit qualityen_HK
dc.subjectCross-listingen_HK
dc.subjectLegal regimeen_HK
dc.titleCross-listing audit fee premiums: Theory and evidenceen_HK
dc.typeArticleen_HK
dc.identifier.openurlhttp://library.hku.hk:4550/resserv?sid=HKU:IR&issn=0001-4826&volume=84&issue=5&spage=1429&epage=1463&date=2009&atitle=Cross-listing+audit+fee+premiums:+Theory+and+evidence-
dc.identifier.emailLiu, X: acliu@hku.hken_HK
dc.identifier.authorityLiu, X=rp01079en_HK
dc.description.naturelink_to_subscribed_fulltext-
dc.identifier.doi10.2308/accr.2009.84.5.1429en_HK
dc.identifier.scopuseid_2-s2.0-72149099092en_HK
dc.identifier.hkuros171786en_HK
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-72149099092&selection=ref&src=s&origin=recordpageen_HK
dc.identifier.volume84en_HK
dc.identifier.issue5en_HK
dc.identifier.spage1429en_HK
dc.identifier.epage1463en_HK
dc.identifier.eissn1558-7967-
dc.identifier.isiWOS:000270298300004-
dc.publisher.placeUnited Statesen_HK
dc.identifier.scopusauthoridChoi, JH=24774347900en_HK
dc.identifier.scopusauthoridKim, JB=8304603800en_HK
dc.identifier.scopusauthoridLiu, X=8409667100en_HK
dc.identifier.scopusauthoridSimunic, DA=8409667000en_HK

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