||Audit Committee Characteristics and Fee Discounting for Initial Audit Engagements
||Department of Accountancy
audit committee characteristics
研究樣本使用台灣所有上市櫃公司，樣本年度為2003年至2016年，參照Huang et.al(2009)及Huang et.al(2015)的審計公費模型加以實證，將所有樣本共劃分四種型態，並額外使用Change Model以捕捉公費變化，同時克服遺漏變數的可能性。
實證結果顯示同時更換會計師事務所及雙簽會計師時，其與審計公費呈現負顯著關聯性，顯示台灣上市櫃公司發生此種型態變化時，仍存在公費折價的情形；而審計委員會特性中的財會專家比例，則具備調節初次審計委任公費折價的效果，並皆經Change Model、Robustness Test加以驗證，然而額外測試顯示此結論僅存在於高審計公費的上市櫃公司，而本研究為低價競爭議題的延伸，可供實務界、學術界加以參考，為台灣的低價競爭、審計委員會等研究領域提供實證證據。
This paper examines whether fee discounting for initial audit engagements still exists in Taiwan and how characteristics of audit committees smooth down effects of low-balling. As a result of high passing rate in obtaining accountant licenses and the policy of cancelling the audit fee floor, it has been popular that accountants tend to adopt strategies of low-balling for establishing the long-term relationship with clients in Taiwan for a long time. However, they may neglect required works or reach a compromise with the management if they don’t charge sufficient fees. Therefore, it can lead to issues of impairing independences and audit quality. On the other hand, audit committees play key roles in maintaining the corporate governance. Their works involve the selection and compensation of accountants as well. If audit committees are more effective, they should be devoted to achieving goals of overseeing quality of financial reporting or internal control more likely. As a result, they may decide a higher level of audit fees because they also rely on external auditors’ assistance.
The sample comprises all publicly-traded companies ranging between 2003 and 2016 in Taiwan Stock Exchange. Running regressions with different types of changes, we find that fee discounting for initial audit engagements still exists in Taiwan so far. Consistent with the hypothesis, we also prove the relations that effects of fee discounting will be smoothed down if the ratio of expertise in finance or accounting is high in audit committees. However, this finding is certified only in the group of high audit fees. As expected, we find evidence in the association between characteristics of audit committees and effects of fee discounting.
1. Introduction 1
2. Literature and Hypothesis Development 2
2.1 Low-Balling 2
2.2 Similar and Unique Characteristics of the Audit Market between Taiwan and U.S 4
2.3 Audit Committee Characteristics and Audit Fees 5
3. Sample Selection and Methodology 8
3.1 Sample Selection 8
3.2 Audit Fee Model 12
3.3 Audit Committee Model 14
4. Results and Discussions 16
4.1 Descriptive Statistics 16
4.2 Univariate Statistics 18
4.3 Regression Analysis of Audit Pricing for Initial Audit Engagements 19
4.4 Regression Analysis of Audit Committee Characteristics 20
4.5 Robustness Tests for Audit Committee Characteristics 22
4.6 Additional Tests for Audit Committee Characteristics 24
5. Conclusion 27
6. References 29
7. Appendix 33
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