Judicial Efficiency and Audit Fees:A Quasi-natural Experiment Based on Pilot Judicial Reform
With the changes in judicial efficiency,the audit environment undergoes great changes,which in turn affects audit pricing.Based on the characteristics of staggered occurrence in time and space of China's pilot judicial reform,this paper employs a difference-in-difference model to investigate the causal impact of judicial efficiency on audit fees and its mechanism with a panel of Chinese listed firms during the 2012-2018.We find that compared to firms in areas without pilot judicial reform,audit fees for firms in areas with pilot judicial reform have significantly increased.The mechanism test results show that judicial efficiency has changed the audit environment,affecting firms'audit fees through the path of risk premium rather than cost compensation.Moreover,the results indicate that the positive impact of judicial efficiency on audit fees is more prominent in firms with less media attention,less analyst attention,lower internal control quality,non-state-owned characteristics,and more experienced auditors.This paper not only captures new evidence from a dynamic perspective that judicial efficiency promotes the healthy development of the capital market,but also enriches and expands relevant research on the factors affecting audit fees,and further provides empirical evidence for the effectiveness of judicial reform.
万方数据
维普
