MD&A readability, auditor characteristics, and audit fees
This paper investigates the relationship between audit fees and MD&A readability in China. We find that audit fees generally are higher when MD&A readability is lower. However, we find Big4 auditors and industry specialist auditors do not increase audit fees when MD&As are less readable...
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| Veröffentlicht in: | Accounting and finance (Parkville) 2021-12, Vol.61 (4), p.5025-5050 |
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| creator | Wang, Le Chen, Xiaoyan Li, Xing Tian, Gaoliang |
| description | This paper investigates the relationship between audit fees and MD&A readability in China. We find that audit fees generally are higher when MD&A readability is lower. However, we find Big4 auditors and industry specialist auditors do not increase audit fees when MD&As are less readable while the other auditors do. We also find that it is the content unique to the reporting firm, rather than standard industry and market content in a MD&A that affects auditor fees. Our results also support that audit risk and audit efforts are two channels through which MD&A readability affects audit fees. |
| doi_str_mv | 10.1111/acfi.12748 |
| format | Article |
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| identifier | ISSN: 0810-5391 |
| ispartof | Accounting and finance (Parkville), 2021-12, Vol.61 (4), p.5025-5050 |
| issn | 0810-5391 1467-629X |
| language | eng |
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| source | Wiley Online Library Journals Frontfile Complete; Business Source Complete |
| subjects | Audit efforts Audit fees Audit risk Auditor characteristics Auditors Information decomposition Management Discussion & Analysis MD&A readability |
| title | MD&A readability, auditor characteristics, and audit fees |
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