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Auditor Perception of Corporate Excess Cash Holdings: The French Evidence

Author

Listed:
  • Ghassen Allani

    (UPHF - Université Polytechnique Hauts-de-France, LARSH - Laboratoire de Recherche Sociétés & Humanités - UPHF - Université Polytechnique Hauts-de-France - INSA Hauts-De-France - INSA Institut National des Sciences Appliquées Hauts-de-France - INSA - Institut National des Sciences Appliquées)

  • Imen Ben Brahim

    (QUARTZ - Laboratoire QUARTZ - UP8 - Université Paris 8 Vincennes-Saint-Denis - ENSEA - Ecole Nationale Supérieure de l'Electronique et de ses Applications - ISAE-Supméca - ISAE-Supméca Institut Supérieur de Mécanique de Paris, ISAE-Supméca - ISAE-Supméca Institut Supérieur de Mécanique de Paris)

  • Yves Mard

    (CleRMa - Clermont Recherche Management - ESC Clermont-Ferrand - École Supérieure de Commerce (ESC) - Clermont-Ferrand - UCA [2017-2020] - Université Clermont Auvergne [2017-2020])

Abstract

The audit literature highlights the influence of the context on the relationship between excess cash and audit fees (Gleason et al., 2017; Kuo et al., 2022). We study this relationship in the French context, which presents several specificities regarding corporate governance and audit regulation. The empirical study conducted on an initial sample of 1411 observations of French-listed firms over the period [2008- 2018] shows that excess cash is associated with lower audit fees. However, this relationship no longer holds for firms whose accounting and financial decisions may seem contradictory to holding excess cash. These results complement previous research and show an intermediate situation between those described in the American and Chinese contexts. French auditors generally look favorably on excess cash, but their perception can change, charging extra fees in circumstances where holding excess cash may seem suboptimal.

Suggested Citation

  • Ghassen Allani & Imen Ben Brahim & Yves Mard, 2024. "Auditor Perception of Corporate Excess Cash Holdings: The French Evidence," Post-Print hal-04606202, HAL.
    • Handle: RePEc:hal:journl:hal-04606202
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    Keywords

    Excess Cash Holdings; Audit Fees;

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