Does options trading affect audit pricing?

被引：0

作者：

Ali, Muhammad Jahangir ^{[1
]}

Balachandran, Balasingham ^{[2
,3
]}

Duong, Huu Nhan ^{[4
]}

Puwanenthiren, Premkanth ^{[5
]}

Theobald, Michael ^{[6
]}

机构：

[1] La Trobe Univ, Dept Accounting Data Analyt Econ & Finance, Melbourne, Australia

[2] Monash Univ, Sch Business, Selangor, Malaysia

[3] La Trobe Univ, La Trobe Business Sch, Bundoora, Vic, Australia

[4] Monash Univ, Monash Business Sch, Dept Banking & Finance, Clayton, Vic, Australia

[5] Westminster Univ, Sch Finance & Accounting, London, England

[6] Univ Birmingham, Dept Accounting & Finance, Birmingham, England

来源：

JOURNAL OF BUSINESS FINANCE & ACCOUNTING | 2024年

关键词：

audit fees; auditor opinion on internal controls; information asymmetry; lawsuits; material weakness; options trading; restatements; LITIGATION RISK; EARNINGS MANAGEMENT; INDUSTRY SPECIALIZATION; BUSINESS RISK; INFORMATION ACQUISITION; INSTITUTIONAL INVESTORS; CORPORATE GOVERNANCE; BOARD INDEPENDENCE; FEES; QUALITY;

D O I：

10.1111/jbfa.12821

中图分类号：

F8 [财政、金融];

学科分类号：

0202 ;

摘要：

We examine the impact of options trading on audit pricing for a sample of US firms over the period from 2004 to 2021. We find that options trading is significantly and negatively related to audit fees, indicating that firms characterized by higher options trading incur lower audit fees. Auditors spend a lower number of days auditing firms with higher options trading and firms with higher options trading experience lower probabilities of lawsuits, and misstatements, and lower likelihood of material weaknesses and auditor opinion on internal controls. The impact of options trading on audit fees is stronger when the auditor is located further away from the audited firm, for firms with non-specialized auditors, higher information asymmetry problems, poorer earnings and lower governance quality. Overall, our findings underscore the significance of options trading in improving a firm's information environment and reducing litigation risk, resulting in lower audit fees.

引用

页数：43

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