This study examines the demand for audits in a modern voluntary audit setting, in which a number of levels of auditor quality can be chosen. Where audits are not compulsory, a substantial number of organizations choose them. The choice of auditor quality is associated with size, debt and salaries, but not with donations and grants. The results provide support for the audit as a form of monitori...

Audit fee studies often find large (Big 5) audit firms earn significantly higher fees than small (non-Big 5) firms, but they treat auditor choice as exogenous. In contrast, this paper takes into account that companies are not randomly assigned to audit firms. We find the effects of auditor selection bias on audit fees are statistically and economically significant. Consistent with the predictio...

We find that risk management committees and BIG4 audit firms contribute to fees. use observations of 895 companies registered in Indonesia for 2014–2018, answer our hypothesis we used ordinary least squares analysis. The results show weakens the relationship between RMC Our study proves higher demand coverage will occur if there is a committee within company. As result, fees increase. may high-...

In this paper, we identify instances in which the auditor-client relationship has been terminated (i.e., the auditor resigns or the client dismisses the auditor) but the auditor continues to complete a subsequent quarterly review. Using discretionary accruals and earnings benchmark tests to proxy for the extent of earnings management, we contrast earnings management behavior during these “lame ...

We provide evidence that the financing decisions of companies that are audited by a Big Six auditor are less affected by information asymmetry. Specifically, these companies enjoy greater financial flexibility and depend less on favorable market conditions for their equity issuance decisions than those not audited by a Big Six firm. As a consequence, their debt ratios are less affected either b...