Impact of Parent Companies and Multiple Large Shareholders on Audit Fees in Stakeholder-Oriented Corporate Governance

This study aimed to investigate the impact of parent companies and other multiple large shareholders (MLSs) on audit fees in Japanese firms, where stakeholder-oriented corporate governance is adopted. In such a firm, monitoring by many stakeholders can mitigate conflicts among shareholders. However, because key these firms tend resolve information asymmetry problems through insider communication, level effort affected not only risk from principal–principal conflicts, but also demands stakeholders. spin off their departments with high growth potential provide incentives lower subsidiaries’ cost capital disclosure. Therefore, require greater efforts, consequently, are expected be higher. when MLSs listed subsidiary, they obtain relevant via private communication. Thus, need for quality accounting will smaller, required as result, smaller. The results consistent expectations. paper contributes sustainable economic development markets has implications effective mechanisms.