Talking More Erring Less:The Effect of Monthly Business Reports on Audit Fees
The monthly business report is an information disclosure exploration of China's capital market.We manually collect the monthly business report data and analyse the effect of monthly business reports on audit fees and explanatory mechanisms using the Staggered DID method.Firstly,we find that monthly business reports decrease the firms'audit fees,and this negative influence could persist for three years.The more regularly firms disclose monthly business reports,the lower audit fees charged.Secondly,monthly business reports decrease audit fees through the audit risk channel.As the monthly business report is disclosed,the information quality is improved,and the operating risk is decreased.Thus,audit risk premium decreased.Third-ly,heteroscedastic regression analyses show that monthly business report disclosure exerts a more significant negative impact on audit fees in firms with more complex businesses or weaker market power.Further analyses find that both mandatory and voluntary disclosure of monthly reports decrease auditing fees.The findings of this research remind auditors to pay more attention to monthly business reports.
Monthly Business ReportAudit FeeRisk of Information Disclosure ManipulationFrequency of Information DisclosureVoluntary Information Disclosure
万方数据
维普
