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Does the power of negotiation influence audit fees? Evidence from the Chinese context

Author

Listed:
  • Jingyan Wang

    (ESC [Rennes] - ESC Rennes School of Business)

  • Helmi Hammami

    (ESC [Rennes] - ESC Rennes School of Business)

  • A.A. Ousama

    (Qatar University)

Abstract

This paper aims to test the impact of negotiation power between auditors and audited companies, in relation to audit fees. The study found that there is a significant positive relationship between auditors' power of negotiation and the audit fees. In addition, it found that there is a significant negative relationship between the size of the audited companies, their negotiating power and the audit fees. These findings indicate that when companies negotiate with Big4 audit firms, their bargaining power does not have a significant effect on the audit fees. Nevertheless, if the auditor is not one of the Big4, there is a significantly negative relationship between the company's bargaining power and audit fees. The relationship therefore changes according to the size of a company. If a company is large, there will be a negative relationship with the audit fees. However, if it is a small company, the relationship is not significant.

Suggested Citation

  • Jingyan Wang & Helmi Hammami & A.A. Ousama, 2022. "Does the power of negotiation influence audit fees? Evidence from the Chinese context," Post-Print hal-03696980, HAL.
    • Handle: RePEc:hal:journl:hal-03696980
    DOI: 10.1504/IJEA.2022.119611
    as

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