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Employee quality and audit fee: evidence from China

Author

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  • Xing Li
  • Xia Chen
  • Baolei Qi
  • Gaoliang Tian

Abstract

This study investigates the association between employee quality and audit fee. Using data for firm‐level employee quality (as proxied by employee education) from Chinese listed firms from 2011 to 2018, we find that firms operated by high‐quality employees enjoy lower audit charges. The association between employee quality and audit fee is more pronounced in firms with a culture of high integrity. Our 2SLS estimation helps us establish a causal link between employee quality and audit fee. The final validity tests suggest that high‐quality employees contribute to lower audit fee by reducing audit risk and audit effort.

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  • Xing Li & Xia Chen & Baolei Qi & Gaoliang Tian, 2020. "Employee quality and audit fee: evidence from China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 60(5), pages 4533-4566, December.
    • Handle: RePEc:bla:acctfi:v:60:y:2020:i:5:p:4533-4566
    DOI: 10.1111/acfi.12664
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    3. Baban Eulaiwi & Ahmed Al‐Hadi & Lien Duong & Keira Clark & Grantley Taylor & Brian Perrin, 2022. "Audit pricing and corporate whistleblower governance: evidence from Australian financial firms," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(2), pages 2339-2384, June.
    4. Muzhi Wang & Weichen Yan, 2022. "Brain Gain: The Effect of Employee Quality on Corporate Social Responsibility," Abacus, Accounting Foundation, University of Sydney, vol. 58(4), pages 679-713, December.
    5. Wang, Maochuan & Yan, Youliang, 2023. "Employee treatment and corporate investment efficiency: Evidence from China," Economic Modelling, Elsevier, vol. 128(C).
    6. Le Wang & Xiaoyan Chen & Xing Li & Gaoliang Tian, 2021. "MD&A readability, auditor characteristics, and audit fees," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 61(4), pages 5025-5050, December.
    7. Anand, Amitabh & Dalmasso, Audrey & Vessal, Saeedeh Rezaee & Parameswar, Nakul & Rajasekar, James & Dhal, Manoranjan, 2023. "The effect of job security, insecurity, and burnout on employee organizational commitment," Journal of Business Research, Elsevier, vol. 162(C).
    8. Md Jahidur Rahman & Tong Wu, 2021. "Volatility of other comprehensive income and audit fees: evidence from China," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 18(1), pages 1-15, March.
    9. Genschick, Franziska & Ghanem, Christiane Al & Grimm, Rüdiger, 2023. "Kompetenzmanagement 50+ - Empfehlungen für den Mittelstand," KCE Schriftenreihe, FOM Hochschule für Oekonomie & Management, KCE KompetenzCentrum für Entrepreneurship & Mittelstand, volume 9, number 282195 edited by FOM Hochschule für Oekonomie & Management, KCE KompetenzCentrum für Entrepreneurship & Mittelstand, July.

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