Cybersecurity risks disclosure and implied audit risks: Evidence from audit fees

被引:17
|
作者
Calderon, Thomas G. [1 ]
Gao, Lei [1 ]
机构
[1] Univ Akron, Coll Business Adm, George W Daverio Sch Accountancy, Akron, OH 44325 USA
关键词
audit fees; audit risk; cybersecurity key words; cybersecurity risk disclosures; readability; text analytics; use of litigious language; ANNUAL-REPORT READABILITY; TEXTUAL ANALYSIS; ASSOCIATION; EARNINGS;
D O I
10.1111/ijau.12209
中图分类号
F8 [财政、金融];
学科分类号
0202 ;
摘要
This study examines the association between companies' cybersecurity risk disclosures and audit fees. Based on a sample from 2005 to 2018, we find that companies' audit fees are not only influenced by the content (number of words), but also by the language (readability and litigious language) disclosed in their cybersecurity risk disclosures. We extend prior studies and find that audit firms assess audit risks not just by evaluating actual cyber breach incidents, but also the cybersecurity risks disclosures more generally. The implication is that the auditor incorporates into their risk assessments, and accordingly their fee structures, the nature and content of cybersecurity risk disclosures. In general, more readable disclosures can reduce audit fees and perhaps other monitoring costs incurred by SEC registrants.
引用
收藏
页码:24 / 39
页数:16
相关论文
共 50 条
  • [1] The Impact of Audit Office Cybersecurity Experience on Nonbreach Client's Audit Fees and Cybersecurity Risks
    Li, He
    Sun, Zhengjie
    Huang, Feiqi
    [J]. JOURNAL OF INFORMATION SYSTEMS, 2024, 38 (01) : 177 - 206
  • [2] Bank Audit Fees and Asset Securitization Risks
    Cullen, Grant
    Gasbarro, Dominic
    Monroe, Gary S.
    Shailer, Greg
    Zhang, Yuyu
    [J]. AUDITING-A JOURNAL OF PRACTICE & THEORY, 2018, 37 (01): : 21 - 48
  • [3] Audit Opinion and Disclosure of Audit Fees
    Lai, Kam-Wah
    [J]. JOURNAL OF ACCOUNTING AUDITING AND FINANCE, 2009, 24 (01): : 91 - 114
  • [4] CYBERSECURITY RISKS AND ITS REGULATIONS. THE PHILOSOPHY OF CYBERSECURITY AUDIT
    Grigoryan, Liana
    Mirzoyan, Lilit
    [J]. WISDOM, 2023, 25 (01): : 67 - 77
  • [5] Can climate-related risks increase audit fees?-Evidence from China
    Yang, Xin
    Wei, Luohan
    Deng, Rantian
    Cao, Jie
    Huang, Chuangxia
    [J]. FINANCE RESEARCH LETTERS, 2023, 57
  • [6] Redacted Disclosure and Audit Fees
    Fei, Xingyuan
    Sun, Estelle Yuan
    Xu, Hongkang
    Zhang, Jiarui
    [J]. JOURNAL OF ACCOUNTING AUDITING AND FINANCE, 2024,
  • [7] Climate change disclosure performance and audit fees: evidence from Australia
    Alshahrani, Faisal
    Eulaiwi, Baban
    Duong, Lien
    Taylor, Grantley
    [J]. SUSTAINABILITY ACCOUNTING MANAGEMENT AND POLICY JOURNAL, 2024,
  • [8] The effect of audit engagement partner professional experience on audit quality and audit fees: early evidence from Form AP disclosure
    Liu, Chenyong
    Xu, Chunhao
    [J]. ASIAN REVIEW OF ACCOUNTING, 2021, 29 (02) : 128 - 149
  • [9] Abnormal Audit Fees and Audit Quality: Evidence from the Korean Audit Market
    Behrend, Matthew J.
    Khan, Sarfraz
    Ko, Young Woo
    Park, Sung-Jin
    [J]. JOURNAL OF INTERNATIONAL ACCOUNTING RESEARCH, 2020, 19 (03) : 37 - 60
  • [10] Audit Market Concentration, Audit Fees, and Audit Quality: Evidence from China
    Huang, Ting-Chiao
    Chang, Hsihui
    Chiou, Jeng-Ren
    [J]. AUDITING-A JOURNAL OF PRACTICE & THEORY, 2016, 35 (02): : 121 - 145