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Auditee religiosity, external monitoring, and the pricing of audit services

Gul, Ferdinand A. and Ng, Anthony C. 2016, Auditee religiosity, external monitoring, and the pricing of audit services, Journal of business ethics, In Press, pp. 1-28, doi: 10.1007/s10551-016-3284-6.

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Title Auditee religiosity, external monitoring, and the pricing of audit services
Author(s) Gul, Ferdinand A.
Ng, Anthony C.
Journal name Journal of business ethics
Season In Press
Start page 1
End page 28
Total pages 28
Publisher Springer
Place of publication Berlin, Germany
Publication date 2016-08-04
ISSN 0167-4544
Keyword(s) auditor quality
audit fees
institutional ownership
debt monitoring
Summary Based on prior studies which show that firms headquartered in high religiosity counties exhibit high level of business ethics, this study examines whether these firms are associated with low audit risk, and therefore low audit fees. In investigating this relationship, we draw a distinction between intrinsic and extrinsic religiosity of auditees. Using a sample of 25,872 U.S. observations from 2003 to 2012, we find that intrinsic religiosity of the auditees is associated with low audit fees after controlling for auditee extrinsic religiosity, social capital, firm-specific characteristics, and county-specific characteristics. Furthermore, we find that external monitoring (institutional ownership and leverage) weakens the negative relationship between auditee intrinsic religiosity and audit fees. Finally, we conclude that the effect of auditor religiosity on audit fees is a regional effect that may affect the relationship between audit fees and auditee intrinsic religiosity.
Language eng
DOI 10.1007/s10551-016-3284-6
Field of Research 150102 Auditing and Accountability
1503 Business And Management
2201 Applied Ethics
1505 Marketing
Socio Economic Objective 970115 Expanding Knowledge in Commerce
HERDC Research category C1 Refereed article in a scholarly journal
ERA Research output type C Journal article
Copyright notice ©2016, Springer Science + Business Media Dordrecht
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Document type: Journal Article
Collections: Department of Accounting
2018 ERA Submission
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