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Managing Economic Policy Uncertainty in Auditor Local Offices

Author

Listed:
  • Indrarini Laksmana

    (Ambassador Crawford College of Business and Entrepreneurship, Kent State University, Kent, OH, USA)

  • Amirali Moeini Chaghervand

    (University of Houston-Downtown, Houston, TX, USA)

  • Rui-Zhong Zhang

    (Ambassador Crawford College of Business and Entrepreneurship, Kent State University, Kent, OH, USA)

  • Shihui Fan

    (Department of Accounting, School of Business, Central Connecticut State University, New Britain, CT, USA)

Abstract

In this paper, we examine the association between economic policy uncertainty (EPU) and both audit fees and audit delay and whether certain characteristics of auditor local offices moderate these relationships. We find that auditors charge lower audit fees and have shorter audit delays during periods of high EPU than during periods of low EPU. Larger auditor offices and industry market leaders decrease audit fees and audit delay more than their counterparts when EPU is high. Auditors do not reduce audit fees for significant clients of a local office but increase audit effort as these clients experience longer audit delays when EPU is high.

Suggested Citation

  • Indrarini Laksmana & Amirali Moeini Chaghervand & Rui-Zhong Zhang & Shihui Fan, 2025. "Managing Economic Policy Uncertainty in Auditor Local Offices," Review of Pacific Basin Financial Markets and Policies (RPBFMP), World Scientific Publishing Co. Pte. Ltd., vol. 28(03), pages 1-27, September.
    • Handle: RePEc:wsi:rpbfmp:v:28:y:2025:i:03:n:s021909152550016x
    DOI: 10.1142/S021909152550016X
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    Keywords

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    JEL classification:

    • M42 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Auditing
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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