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Auditors’ Strategic Audit Pricing: Evidence from the Pre- and Post-IFRS Periods

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Auditors’ Strategic Audit Pricing: Evidence from the Pre- and Post-IFRS Periods. / Choi, Sun Hwa; Choi, Youn-Sik ; Kim, Bum-Joon.
In: Auditing: A Journal of Practice and Theory, 02.11.2017.

Research output: Contribution to Journal/MagazineJournal articlepeer-review

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APA

Choi, S. H., Choi, Y.-S., & Kim, B.-J. (2017). Auditors’ Strategic Audit Pricing: Evidence from the Pre- and Post-IFRS Periods. Auditing: A Journal of Practice and Theory. Advance online publication. https://doi.org/10.2308/ajpt-51964

Vancouver

Choi SH, Choi YS, Kim BJ. Auditors’ Strategic Audit Pricing: Evidence from the Pre- and Post-IFRS Periods. Auditing: A Journal of Practice and Theory. 2017 Nov 2. Epub 2017 Nov 2. doi: 10.2308/ajpt-51964

Author

Choi, Sun Hwa ; Choi, Youn-Sik ; Kim, Bum-Joon. / Auditors’ Strategic Audit Pricing : Evidence from the Pre- and Post-IFRS Periods. In: Auditing: A Journal of Practice and Theory. 2017.

Bibtex

@article{d8bcf6e4fee74010b1b401cab691fe72,
title = "Auditors{\textquoteright} Strategic Audit Pricing: Evidence from the Pre- and Post-IFRS Periods",
abstract = "This study examines the audit pricing by the auditor of a parent company (i.e., principal auditor) when other independent auditors who are not affiliated with the principal auditor (i.e., other auditors) are involved in the audit of the group financial statements. Using Korean data, we find that audit fees charged to the parent company by the principal auditor are negatively associated with the proportion of total assets or sales of subsidiaries audited by other auditors in the pre-IFRS period. This finding is consistent with the argument that the principal auditor views subsidiaries audited by other auditors as a business opportunity to attract new clients and thus offers fee discounts to its client. However, in the post-IFRS period, this negative relation between audit fees and the involvement of other auditors becomes insignificant or positive, suggesting that IFRS adoption restricts auditors' strategic behavior in audit pricing because IFRS adoption increases the audit complexity and risk associated with the involvement of other auditors.",
author = "Choi, {Sun Hwa} and Youn-Sik Choi and Bum-Joon Kim",
year = "2017",
month = nov,
day = "2",
doi = "10.2308/ajpt-51964",
language = "English",
journal = "Auditing: A Journal of Practice and Theory",
issn = "0278-0380",
publisher = "American Accounting Association",

}

RIS

TY - JOUR

T1 - Auditors’ Strategic Audit Pricing

T2 - Evidence from the Pre- and Post-IFRS Periods

AU - Choi, Sun Hwa

AU - Choi, Youn-Sik

AU - Kim, Bum-Joon

PY - 2017/11/2

Y1 - 2017/11/2

N2 - This study examines the audit pricing by the auditor of a parent company (i.e., principal auditor) when other independent auditors who are not affiliated with the principal auditor (i.e., other auditors) are involved in the audit of the group financial statements. Using Korean data, we find that audit fees charged to the parent company by the principal auditor are negatively associated with the proportion of total assets or sales of subsidiaries audited by other auditors in the pre-IFRS period. This finding is consistent with the argument that the principal auditor views subsidiaries audited by other auditors as a business opportunity to attract new clients and thus offers fee discounts to its client. However, in the post-IFRS period, this negative relation between audit fees and the involvement of other auditors becomes insignificant or positive, suggesting that IFRS adoption restricts auditors' strategic behavior in audit pricing because IFRS adoption increases the audit complexity and risk associated with the involvement of other auditors.

AB - This study examines the audit pricing by the auditor of a parent company (i.e., principal auditor) when other independent auditors who are not affiliated with the principal auditor (i.e., other auditors) are involved in the audit of the group financial statements. Using Korean data, we find that audit fees charged to the parent company by the principal auditor are negatively associated with the proportion of total assets or sales of subsidiaries audited by other auditors in the pre-IFRS period. This finding is consistent with the argument that the principal auditor views subsidiaries audited by other auditors as a business opportunity to attract new clients and thus offers fee discounts to its client. However, in the post-IFRS period, this negative relation between audit fees and the involvement of other auditors becomes insignificant or positive, suggesting that IFRS adoption restricts auditors' strategic behavior in audit pricing because IFRS adoption increases the audit complexity and risk associated with the involvement of other auditors.

U2 - 10.2308/ajpt-51964

DO - 10.2308/ajpt-51964

M3 - Journal article

JO - Auditing: A Journal of Practice and Theory

JF - Auditing: A Journal of Practice and Theory

SN - 0278-0380

ER -