HCBE Faculty Articles

Title

Financial Reporting Transparency and Audit Fees

Document Type

Article

Date

7-1-2013

Publication Title

International Research Journal of Applied Finance

ISSN or ISBN

2229-6891

Volume

4

Issue

7

First Page

857

Last Page

873

Description

We investigate the relationship between corporate reporting transparency and audit fees. We predict that higher quality of information disclosure and better corporate reporting transparency can decrease the information asymmetry between the firms and outsiders, reducing the amount of audit risk, resulting in less audit work and lower audit fees. We find evidence of a negative relationship between financial reporting transparency and audit fees. Our results are relevant to public firms, regulators, and the public at large as they demonstrate another possible benefit to greater corporate reporting transparency.

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