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http://dx.doi.org/10.14400/JDC.2017.15.11.167

The Effect of Audit Fee Dumping on the Audit Quality  

Shin, Chan-Hyu (Institute of Management Research, Pusan National University)
Kim, Jeong-Kyo (Business School, Pusan National University)
Publication Information
Journal of Digital Convergence / v.15, no.11, 2017 , pp. 167-174 More about this Journal
Abstract
These days, people distrust the accounting transparency of firms in Korea. It can .increase the capital costs and reduce profitability of firms. Auditors say that one of causes on the low grades of the accounting transparency is free contracts between auditors and firms. Firms want auditors take low audit fees. In principle, if auditors take low audit fees, they cannot input auditor resources to proper audit. However, there are not any empirical evidence about the relation between the audit fees dumping and the audit quality. This study defines dumping auditors if their audit fees are lower than the average of industries, and examines whether these auditors showed low audit qualities or not. As a result, firms which are audited by dumping auditors presented low abnormal accruals. We can interpret this result as that dumping auditors have low audit qualities. This result helps to make policies to improve the accounting transparency of firms.
Keywords
Audit fees dumping; Audit fees; Audit quality; Auditing; Accounting transparency;
Citations & Related Records
Times Cited By KSCI : 3  (Citation Analysis)
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