Litigation risk and audit fees: evidence from UK firms cross-listed on US markets

Seetharaman, Ananth, Gul, Ferdinand A. and Lynn, Stephen G. 2002, Litigation risk and audit fees: evidence from UK firms cross-listed on US markets, Journal of accounting and economics, vol. 33, no. 1, pp. 91-115, doi: 10.1016/S0165-4101(01)00046-5.

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Title Litigation risk and audit fees: evidence from UK firms cross-listed on US markets
Author(s) Seetharaman, Ananth
Gul, Ferdinand A.ORCID iD for Gul, Ferdinand A.
Lynn, Stephen G.
Journal name Journal of accounting and economics
Volume number 33
Issue number 1
Start page 91
End page 115
Total pages 25
Publisher Elsevier
Place of publication Amsterdam, The Netherlands
Publication date 2002-02
ISSN 0165-4101
Keyword(s) Audit fees
Litigation risk
Cross-border listing
Summary Two ingredients necessary to examine the relation between litigation risk and audit pricing are (a) a litigious legal environment, and (b) publicly disclosed auditor remuneration. We combine both ingredients by focusing on UK firms offering to sell their securities publicly in the United States. We find that UK auditors charge higher fees for their services when their clients access US, but not non-US, capital markets. Further, we show that the higher fees cannot be fully explained by the SEC's extensive disclosure requirements. Rather, these findings are consistent with audit fees reflecting risk differences across liability regimes.
Language eng
DOI 10.1016/S0165-4101(01)00046-5
Field of Research 150102 Auditing and Accountability
1402 Applied Economics
1501 Accounting, Auditing And Accountability
Socio Economic Objective 970115 Expanding Knowledge in Commerce
HERDC Research category C1.1 Refereed article in a scholarly journal
ERA Research output type C Journal article
Copyright notice ©2002, Elsevier Science B.V.
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Document type: Journal Article
Collections: Faculty of Business and Law
Department of Accounting
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