IDEAS home Printed from https://ideas.repec.org/a/ami/journl/v13y2014i1p98-110.html
   My bibliography  Save this article

Audit Pricing in China and Pakistan: A Comparative Review of Audit Practices

Author

Listed:
  • Zahid Irshad Younas

    (GC University Lahore, Pakistan)

  • Patrick Velte

    (Leuphana University, Lueneburg, Germany)

  • Khadija Ashfaq

    (GC University Lahore, Pakistan)

Abstract

The purpose of this study is to investigate the firm-level factors effect on the audit pricing in China and Pakistan. For this purpose, we used the panel data of 160 firms of each country of study for the period from 2005 to 2011. First, we run the combined model for two countries and observed that complexity of business transaction is the only variable contributing positively and significantly in audit pricing of both countries. Then, for comparative review, we segregated the data of each country and run separate model. The results of separate models show that, in the case of Pakistan auditors mainly consider complexity of business transactions and client risk while pricing their engagement as an auditor. However, in the case of China the auditors only consider the Big 4 audit firm effect as a reputational tool while pricing their audit activity. The auditors in China totally ignore the client risk and complexity of business transactions which may be problematic for their auditing firm in future. The study concludes that audit pricing in Pakistan is more rational in comparison to China.

Suggested Citation

  • Zahid Irshad Younas & Patrick Velte & Khadija Ashfaq, 2014. "Audit Pricing in China and Pakistan: A Comparative Review of Audit Practices," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 13(1), pages 98-110, March.
    • Handle: RePEc:ami:journl:v:13:y:2014:i:1:p:98-110
    as

    Download full text from publisher

    File URL: http://online-cig.ase.ro/RePEc/ami/articles/13_1_5.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    audit pricing; corporate governance; client risk; big 4 audit firms; audit quality;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ami:journl:v:13:y:2014:i:1:p:98-110. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Cristina Tartavulea (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.