Market Competition, Audit Fee Stickiness, and Audit Quality : Evidence from China
Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › peer-review
Author(s)
Related Research Unit(s)
Detail(s)
| Original language | English |
|---|---|
| Pages (from-to) | 79-99 |
| Journal / Publication | Auditing: A Journal of Practice & Theory |
| Volume | 38 |
| Issue number | 2 |
| Online published | Jun 2018 |
| Publication status | Published - May 2019 |
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Abstract
This study examines how audit fee stickiness varies with changes in market competition in China and its effect on audit quality. The Chinese audit market structure has changed significantly since the Chinese Institute of Certified Public Accountants (CICPA) issued a proposal to enhance the competitiveness of large domestic audit firms by promoting the consolidation of domestic audit firms in 2007. Using a sample of Chinese listed firms, we find a decrease in upward stickiness and an increase in downward stickiness as market concentration increases in the post-Proposal period. The asymmetry between upward and downward fee stickiness is greater in local markets that are more dominated by the top 10 domestic auditors. Moreover, we find that upward (downward) fee stickiness has a negative (positive) association with audit quality as measured by earnings management and auditor reporting conservatism.
Research Area(s)
- audit fee stickiness, audit quality, China, CICPA, market competition
Bibliographic Note
Research Unit(s) information for this publication is provided by the author(s) concerned.
Citation Format(s)
Market Competition, Audit Fee Stickiness, and Audit Quality : Evidence from China. / Chang, Hsihui; Guo, Yingwen; Mo, Phyllis Lai Lan.
In: Auditing: A Journal of Practice & Theory, Vol. 38, No. 2, 05.2019, p. 79-99.Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › peer-review
