Journal article
Corporate lobbying: Resource-seeking or rent-seeking? Evidence from audit fees
Journal of Contemporary Accounting and Economics, Vol.19(1), pp.1-18
2023
Abstract
Theory and prior research suggest that corporate lobbying is a primary means that corporations use to influence government policies either for improving firm performance (i.e., strategic decisions) or for rent-seeking activities (i.e., agency costs) but the evidence between lobbying activities and auditor assessments of audit risk remains unclear. Our results show that lobbying firms are associated with higher audit risks and fees, consistent with the idea that lobbying is related to rent-seeking and higher agency costs. In cross-sectional analyses, we find that the positive association between lobbying and audit fees is weaker for firms with strong corporate governance. Further analysis shows that firm financial returns or low earnings quality mediate the relationship between lobbying and audit fees. The results suggest that practitioners, users of financial statements and regulators could benefit by recognizing that lobbying activities could signal managerial opportunistic behavior.
Details
- Title
- Corporate lobbying: Resource-seeking or rent-seeking? Evidence from audit fees
- Authors
- Steven Yik-Pui Low (Corresponding Author) - Deakin UniversityYee-Boon Foo - Sunway UniversityFerdinand Gul - Deakin University
- Publication details
- Journal of Contemporary Accounting and Economics, Vol.19(1), pp.1-18
- Publisher
- Elsevier Ltd
- Date published
- 2023
- DOI
- 10.1016/j.jcae.2022.100341
- ISSN
- 2352-3298
- Organisation Unit
- School of Business and Creative Industries
- Language
- English
- Record Identifier
- 991014098502621
- Output Type
- Journal article
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- Collaboration types
- Domestic collaboration
- International collaboration
- Web Of Science research areas
- Business, Finance
- Economics