AJIBM  Vol.9 No.3 , March 2019
Number of Regional Accounting Firms and Audit Fees—Based on the Experience Data of Listed Companies in China in 2016
There are many research literatures on the influencing factors of auditing firms’ audit fees, but their influence on audit fees is rarely studied from geographical factors. This paper studies the relationship among the number of regional accounting firms, whether they are local and audit fees, and uses the 2016 A-share listed companies as a sample to collect the number of accounting firms in the cities where the listed companies are located through the Chinese CPA industry management information system; the CPA determines whether it is a local firm. The empirical results show that the number of regional accounting firms is significantly and positively related to audit fees. The greater the number of firms in the region, the higher the audit fees the company will pay. Moreover, this phenomenon is more prominent in the companies who employ local audits. Further research found that the increase in audit fees in the region is a significant manifestation of the improvement in audit quality.
Cite this paper: Fang, H. (2019) Number of Regional Accounting Firms and Audit Fees—Based on the Experience Data of Listed Companies in China in 2016. American Journal of Industrial and Business Management, 9, 592-608. doi: 10.4236/ajibm.2019.93041.

[1]   Simunic, D.A. (1980) The Pricing of Audit Services: Theory and Evidence. Journal of Accounting Research, 18, 161-190.

[2]   Francis, J. (1984) The Effect of Audit Firm Size on Audit Prices: A Study of the Australian Market. Journal of Accounting and Economies, 6, 133-151.

[3]   Chen, P., Ezzamel, M. and Gwilliam, D. (1993) Determinants of Audit Fees for Quoted UK Companies. Journal of Business Finance Accounting, 20, 765-786.

[4]   Abbott, L.J., Parker, S., Peters, G.F. and Raghunandan, K. (2003) The Association between Audit Committee Characteristics and Audit Fees. Auditing: A Journal of Practice & Theory, 22, 17-32.

[5]   Carcello, J.V., Hermanson, D.R., Neal, T.L. and Riley, R.A. (2002) Board Characteristics and Audit Fees. Contemporary Accounting Research, 19.

[6]   Wang, Z.L. (2002) Decisions on Audit Fees and Audit Quality: Evidence from Chinese Listed Companies. PhD Thesis, Shanghai University of Finance and Economics, Shanghai.

[7]   Liu, B., Ye, J.Z. and Liao, Y.Y. (2003) Empirical Study on the Influencing Factors of Audit Fees of China’s Listed Companies—Evidence from Shenzhen-Shanghai Annual Report. Audit Research, No. 1, 44-47.

[8]   Han, H.J. and Zhou, S.C. (2003) Research on Accountant Compensation in China’s Securities Market—Analysis of Empirical Data of Listed Companies. Management World, No. 2, 15-22.

[9]   Qi, J.N., Chen, H.L. and Zhang, Y. (2004) Firm Size, Brand, Price and Audit Quality: “International Four” China Audit Market Charging and Quality Research. Audit Research, No. 3, 59-64.

[10]   Zhu, X.P. and Yu, Q. (2004) Empirical Analysis of Factors Affecting Audit Fees in China. China Accounting Review, 2, 393-408.

[11]   Lu, L.M. and Lu, Y. (2010) Research on the Influencing Factors of China’s Independent Audit Fees—Evidence Based on Stock Market. Journal of Harbin University of Commerce, 12, 99-125.

[12]   Wang, B. and Xin, Q.Q. (2010) Does the Audit of the Branch Affect Audit Quality and Audit Fees. Audit Research, No. 2, 70-76.

[13]   Zhang, Q.F., Zhang, M. and Dai, J.J. (2006) A Review of Empirical Research on Audit Pricing in China. Accounting Research, No. 6, 87-93.