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Studying the Effect of Market Competition on the Auditing Fees and the Operational Costs Efficiency as the Agency Costs Indexes

Author

Listed:
  • Hashem Valipour

    () (Islamic Azad University)

  • Javad Moradi

    () (Shiraz University)

  • Ehsan Heshmatzade

    () (Islamic Azad University)

Abstract

In the study the effect of market competition on the agency costs was examined in the companies listed in Tehran stock exchange; hence, 56 companies were examined in 2005–2010. The selected approach benefits from Panel Data to test the hypotheses and the natural logarithm of auditing fees and operational costs ratio were considered to calculate the agency costs. The findings indicate that there is significant relation between the competition effect in the product market and agency costs when the confidence rate is 95 percent; also the findings indicate that the debt rate has no significant effect on the agency costs.

Suggested Citation

  • Hashem Valipour & Javad Moradi & Ehsan Heshmatzade, 2013. "Studying the Effect of Market Competition on the Auditing Fees and the Operational Costs Efficiency as the Agency Costs Indexes," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 3(3), pages 95-104, July.
  • Handle: RePEc:hur:ijaraf:v:3:y:2013:i:3:p:95-104
    as

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    References listed on IDEAS

    as
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    2. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
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    4. James S. Ang & Rebel A. Cole & James Wuh Lin, 2000. "Agency Costs and Ownership Structure," Journal of Finance, American Finance Association, vol. 55(1), pages 81-106, February.
    5. Taylor, Mark H. & Simon, Daniel T., 1999. "Determinants of audit fees: the importance of litigation, disclosure, and regulatory burdens in audit engagements in 20 countries," The International Journal of Accounting, Elsevier, vol. 34(3), pages 375-388, August.
    6. W. V. Harlow & John S. Howe, 1993. "Leveraged Buyouts and Insider Nontrading," Financial Management, Financial Management Association, vol. 22(1), Spring.
    7. Waresul Karim, A. K. M. & Moizer, Peter, 1996. "Determinants of audit fees in Bangladesh," The International Journal of Accounting, Elsevier, vol. 31(4), pages 497-509.
    8. Esther Gal-Or, 1997. "Multiprincipal Agency Relationships as Implied by Product Market Competition," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 6(1), pages 235-256, June.
    9. Karuna, Christo, 2007. "Industry product market competition and managerial incentives," Journal of Accounting and Economics, Elsevier, vol. 43(2-3), pages 275-297, July.
    10. Preston R. Fee & Hugo M. Mialon & Michael A. Williams, 2004. "What Is a Barrier to Entry?," American Economic Review, American Economic Association, vol. 94(2), pages 461-465, May.
    11. Fama, Eugene F, 1980. "Agency Problems and the Theory of the Firm," Journal of Political Economy, University of Chicago Press, vol. 88(2), pages 288-307, April.
    12. repec:bla:joares:v:22:y:1984:i:2:p:679-702 is not listed on IDEAS
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