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The Relationship Between CEO Power, Audit Fees and Corporate Growth Opportunities

Author

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  • Mohammad Reza Nikbakht

    (Associate Prof. of Accounting, Faculty of Management, University of Tehran, Tehran, Iran)

  • Mehran Jahandoust Marghoub

    (Ph.D. Candidate, Department of Accounting, Faculty of Economics and Administrative Sciences, University of Mazandaran, Babolsar, Iran)

  • Soraya Weysihesar

    (MSc. of Accounting, KAR Higher Education Institute, Qazvin, Iran)

Abstract

One of the most important goals of companies is to create value and increase the wealth of shareholders in the long run and the increase in wealth will be achieved only as a result of the desired performance of the company and the desired performance will be achieved with proper management of the company. In this regard, company managers and especially the CEO play an important role in running the company. Therefore, various decisions in the company are influenced by the power and influence of the CEO. Also, the impact of the CEO's power and influence on the company's outcomes depends on the comparative advantage of benefits and costs. Therefore, in this study, the relationship between CEO power, audit fees and corporate growth opportunities has been investigated. The statistical population of the research is the companies listed on the Tehran Stock Exchange and the research period is from 2011 to 2020. To test the research hypotheses, 77 companies were selected by systematic elimination method. To test the hypotheses, panel data were used and the relationship between variables was estimated using multivariate regression. The results show that there is a negative (positive) and significant relationship between CEO power (audit fee) and corporate growth opportunities. Also, CEO power has a significant moderating effect on the relationship between audit fees and corporate growth opportunities. The research findings could cover the research gap in this area and be useful for managers, investors, and capital market lawmakers in decision making.

Suggested Citation

  • Mohammad Reza Nikbakht & Mehran Jahandoust Marghoub & Soraya Weysihesar, 2022. "The Relationship Between CEO Power, Audit Fees and Corporate Growth Opportunities," New Challenges in Accounting and Finance, EUROKD, vol. 7, pages 13-26.
    • Handle: RePEc:bco:ncafaa::v:7:y:2022:p:13-26
    DOI: 10.32038/NCAF.2022.07.02
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    References listed on IDEAS

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    1. Ling Lei Lisic & Terry L. Neal & Ivy Xiying Zhang & Yan Zhang, 2016. "CEO Power, Internal Control Quality, and Audit Committee Effectiveness in Substance Versus in Form," Contemporary Accounting Research, John Wiley & Sons, vol. 33(3), pages 1199-1237, September.
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