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Audit fees and earnings managment: differences based on the type of audit

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Audit fees and earnings managment: differences based on the type of audit

dc.contributor.author	Gandía, Juan L.
dc.contributor.author	Huguet, David
dc.date.accessioned	2023-11-23T16:28:58Z
dc.date.available	2023-11-23T16:28:58Z
dc.date.issued	2021
dc.identifier.uri	https://hdl.handle.net/10550/91391
dc.description.abstract	In spite of the extensive research about the impact of audit fees on audit quality, there is no research examining if the association between voluntary audits and audit pricing affects audit quality. Therefore, the aim of this paper is to empirically examine whether the effect of audit fees on audit quality, measured by the level of earnings management, is affected by the type of audit (voluntary vs mandatory), as well as whether the effect of audit fees on audit quality is different depending on the type of audit. Using a sample of Spanish SMEs composed of both voluntarily and mandatorily audited companies, we find that voluntary audits have higher quality when audit fees are lower, but the differences in audit quality between voluntary and mandatory audits reverse as audit fees increase, and mandatory audits are more effective at deterring earnings management when audit fees are high. Additional analyses show that voluntary audits do not directly affect earnings management; instead, voluntary audits are associated with abnormal fees, which in turn negatively affect earnings management. The results also show that audit fees are only negatively associated with earnings management when accruals are income-increasing, which is related to auditor conservatism.
dc.language.iso	eng
dc.relation.ispartof	Economic Research-Ekonomska Istrazivanja, 2021, vol. 34, num. 1, p. 2628-2650
dc.source	Gandía, Juan L., Huguet, David (2021). Audit fees and earnings managment: differences based on the type of audit. Economic Research-Ekonomska Istrazivanja, 34, 1, 2628 2650. https://doi.org/10.1080/1331677X.2020.1836990
dc.subject	economia
dc.subject	auditoria fiscal
dc.subject	economia d'empresa
dc.subject	audit fees	en
dc.subject	voluntary audit	en
dc.subject	audit quality	en
dc.subject	earnings management	en
dc.title	Audit fees and earnings managment: differences based on the type of audit
dc.type	journal article
dc.date.updated	2023-11-23T16:28:58Z
dc.identifier.doi	10.1080/1331677X.2020.1836990
dc.identifier.idgrec	141331
dc.rights.accessRights	open access