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CEO cultural heritage and the pricing of audit services

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  • Anh Viet Pham
  • Mia Hang Pham
  • Cameron Truong

Abstract

We construct preferences toward risk and uncertainty as reflected in the cultural heritage of chief executive officers (CEOs) managing public firms in the United States. We demonstrate that auditors take into account the cultural traits of CEOs in the pricing of their audit services. We also show that CEO cultural heritage is associated with a firm's misreporting, internal control weakness, and accounting conservatism. The results are robust to controlling for other known attributes of CEOs, firm characteristics, and corporate governance. Our study contributes to research on corporate risk culture, CEO characteristics, and determinants of the pricing of audit services and financial reporting quality.

Suggested Citation

  • Anh Viet Pham & Mia Hang Pham & Cameron Truong, 2022. "CEO cultural heritage and the pricing of audit services," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 49(1-2), pages 181-214, January.
    • Handle: RePEc:bla:jbfnac:v:49:y:2022:i:1-2:p:181-214
    DOI: 10.1111/jbfa.12550
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