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Published VersionCC BY-NC-ND V4.0, Open Access
Journal article
Do Political Connections Help or Harm Family Firms? An Audit Pricing Perspective
The Chinese Economy, Vol.57(5), pp.395-414
2024
Appears in UniSC Supported Open Access Outputs
Abstract
Past business ethics research highlights negative perceptions about corporate governance of family firms, and yet many auditors evaluate family businesses favorably and charge them lower audit fees; however, this inconsistency remains unexplained. Moreover, the impact of family firms' political connections and board gender diversity on audit fees is still not clear. Based on the data from listed Chinese family firms, we address these important research gaps by using the local institutional environment in which the client operates as a moderator of the process by which auditors assess the implications of clients' political connections. Political connections reduce audit fees when a client is located in a region with high-quality public administration. Female representation in audit committees positively moderates the relationship between political connections and audit fees, as female committee members react to their firms' political connections by demanding higher levels of assurance from auditors. Female committee members also demand higher audit efforts for family firms managed by non-family-member CEOs.
Details
- Title
- Do Political Connections Help or Harm Family Firms? An Audit Pricing Perspective
- Authors
- Pat Yan Cheung - Hong Kong Metropolitan UniversityTak Yan Leung (Corresponding Author) - University of the Sunshine Coast, Queensland, School of Business and Creative Industries
- Publication details
- The Chinese Economy, Vol.57(5), pp.395-414
- Publisher
- Routledge
- Date published
- 2024
- DOI
- 10.1080/10971475.2024.2321706
- ISSN
- 1558-0954; 1097-1475
- Copyright note
- © 2024 The Author(s). Published with license by Taylor & Francis Group, LLC. This is an Open Access article distributed under the terms of the Creative Commons Attribution-NonCommercial-NoDerivatives License (http://creativecommons.org/licenses/by-nc-nd/4.0/), which permits non-commercial re-use, distribution, and reproduction in any medium, provided the original work is properly cited, and is not altered, transformed, or built upon in any way. The terms on which this article has been published allow the posting of the Accepted Manuscript in a repository by the author(s) or with their consent.
- Organisation Unit
- School of Business and Creative Industries
- Language
- English
- Record Identifier
- 991013096602621
- Output Type
- Journal article
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- Collaboration types
- Domestic collaboration
- International collaboration
- Web Of Science research areas
- Economics