Determinants of Audit Fees and the Role of the Board of Directors and Ownership Structure: Evidence from Jordan

• 발행기관: 한국유통과학회
• 저자명: Mohammad Ziad SHAKHATREH Safaa Adnan ALSMADI
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 8 No.5, 627~637쪽, 전체 11쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2021.05.30

영문 초록

This research extends the literature on the effect of board characteristics and ownership structure on audit fees; these factors affect the firm’s agency costs and how the auditor assesses various risks, hence the audit efforts and fees. The paper introduces political connections as a determinant of audit fees for the first time in Jordan, where the political connection is prevalent and affects decision making on the Jordanian boards. The sample consists of 109 manufacturing and service firms listed on the Amman Stock Exchange (ASE) over the years 2012–2019. Data is obtained from the ASE and the company’s annual reports. Board characteristics are measured by board size, independence, leadership duality, meetings frequency, political connections, and audit committee. Ownership structure was measured by concentration, foreign ownership, and Institutional ownership. The study hypotheses were tested by using Generalized Least Squares regression. The Findings showed that larger boards, politically connected firms, and firms with leadership duality are more likely to pay higher fees. Besides, Firms with greater foreign ownership pay less fees, whereas the rest of the variables are insignificant. Results suggest that political connections play a major role in determining audit fees; this provides a recommendation to policymakers in Jordan to reconsider regulations regarding political connections.

목차

1. Introduction

2. Literature Review and Hypotheses Development

3. Methodology and Data

4. Results

5. Conclusion

키워드

Audit Fees Board of Directors Ownership Structure Political Connection