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Conference Paper: Does Mandatory IFRS Adoption Impact Audit Fees?: Theory and Evidence

TitleDoes Mandatory IFRS Adoption Impact Audit Fees?: Theory and Evidence
Authors
KeywordsAudit fee change
IFRS adoption
Audit complexity
Financial reporting quality
Legal regime
Issue Date2010
PublisherCanadian Academic Accounting Association Inc..
Citation
The 2010 Annual Conference of the Canadian Academic Accounting Association (CAAA), Vancouver, BC., Canada, 27-29 May 2010. How to Cite?
AbstractThis study examines the impact of International Financial Reporting Standards (IFRS) adoption on audit fee. We first build an analytical audit fee model to analyze the impact on audit fee of the change in both audit complexity and financial reporting quality brought about by IFRS adoption. We then develop our hypotheses based on the model’s predictions, and test the hypotheses using audit fee data from European Union countries that mandated IFRS adoption in 2005. We find that mandatory IFRS adoption has led to an increase in audit fees. We also find that the IFRS-related audit fee premium increases with the increase in audit complexity brought about by IFRS adoption, and decreases with the improvement in financial reporting quality arising from IFRS adoption. Finally, we find some evidence that the IFRS-related audit fee premium is lower in countries with strong legal regimes. Our results are robust to a variety of sensitivity checks.
DescriptionConcurrent sessions 4C - Auditing / Audit
Persistent Identifierhttp://hdl.handle.net/10722/202382

 

DC FieldValueLanguage
dc.contributor.authorKim, JB-
dc.contributor.authorLiu, X-
dc.contributor.authorZheng, L-
dc.date.accessioned2014-09-18T03:33:49Z-
dc.date.available2014-09-18T03:33:49Z-
dc.date.issued2010-
dc.identifier.citationThe 2010 Annual Conference of the Canadian Academic Accounting Association (CAAA), Vancouver, BC., Canada, 27-29 May 2010.-
dc.identifier.urihttp://hdl.handle.net/10722/202382-
dc.descriptionConcurrent sessions 4C - Auditing / Audit-
dc.description.abstractThis study examines the impact of International Financial Reporting Standards (IFRS) adoption on audit fee. We first build an analytical audit fee model to analyze the impact on audit fee of the change in both audit complexity and financial reporting quality brought about by IFRS adoption. We then develop our hypotheses based on the model’s predictions, and test the hypotheses using audit fee data from European Union countries that mandated IFRS adoption in 2005. We find that mandatory IFRS adoption has led to an increase in audit fees. We also find that the IFRS-related audit fee premium increases with the increase in audit complexity brought about by IFRS adoption, and decreases with the improvement in financial reporting quality arising from IFRS adoption. Finally, we find some evidence that the IFRS-related audit fee premium is lower in countries with strong legal regimes. Our results are robust to a variety of sensitivity checks.-
dc.languageeng-
dc.publisherCanadian Academic Accounting Association Inc..-
dc.relation.ispartofAnnual Conference of the Canadian Academic Accounting Association, CAAA 2010-
dc.rightsCreative Commons: Attribution 3.0 Hong Kong License-
dc.subjectAudit fee change-
dc.subjectIFRS adoption-
dc.subjectAudit complexity-
dc.subjectFinancial reporting quality-
dc.subjectLegal regime-
dc.titleDoes Mandatory IFRS Adoption Impact Audit Fees?: Theory and Evidenceen_US
dc.typeConference_Paperen_US
dc.identifier.emailLiu, X: acliu@hku.hk-
dc.identifier.emailZheng, L: lzheng@business.hku.hk-
dc.description.naturepublished_or_final_version-
dc.identifier.hkuros170638-
dc.publisher.placeCanada-

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