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Audit Committee Characteristics and Low-balling of Audit Fees

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Authors
최보규
Advisor
이창우
Major
경영대학 경영학과
Issue Date
2015-02
Publisher
서울대학교 대학원
Keywords
audit committeeaudit feeslow-ballingaudit quality
Description
학위논문 (석사)-- 서울대학교 대학원 : 경영학과, 2015. 2. 이창우.
Abstract
This paper aims to investigate whether audit committees with certain characteristics effectively avoid initial year audit fee discounts or so called low-balling. Effective audit committees may not be attracted with auditors fee cutting in the initial engagement year to maintain high quality of audit. We classify audit committee based on four aspects that signify the quality of the committee: independence, financial expertise, meeting frequency, and tenure. Consistent with prior research, we find low-balling of audit fees exist in Korean audit market and audit committee independence and meeting frequency are positively associated with audit fees. In particular, audit committees with frequent meetings prevent audit fee discounts in the first engagement year, suggesting that diligent audit committee plays an important role to maintain high audit quality. Finally, we find that the audit committees which satisfy at least one of good governance criteria are effective in preventing initial year audit fee discounts. Sensitivity analyses also reveal that audit committee expertise is also weakly related to higher audit fees.
Language
English
URI
https://hdl.handle.net/10371/124563
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College of Business Administration/Business School (경영대학/대학원)Dept. of Business Administration (경영학과)Theses (Master's Degree_경영학과)
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