Audit fee pressure and audit risk: evidence from the financial crisis of 2008*

Catherine Heyjung Sonu, Hyejin Ahn*, Ahrum CHOI

*Corresponding author for this work

    Research output: Contribution to journalJournal articlepeer-review

    20 Citations (Scopus)

    Abstract

    This paper investigates whether the downward pressure on audit fees during crisis affects the audit fee structure. The empirical results reveal the following: First, audit fees dropped significantly during the financial crisis period. Second, auditors respond differently to small clients and risky clients when facing downward pressure on audit fees. Finally, the above mentioned findings are more pronounced when the client is under high pressure to reduce expenses. Collectively, the above results provide useful insights into how auditors behave when they are under pressure to reduce audit fees.

    Original languageEnglish
    Pages (from-to)127-144
    Number of pages18
    JournalAsia-Pacific Journal of Accounting and Economics
    Volume24
    Issue number1-2
    DOIs
    Publication statusPublished - 3 Apr 2017

    Scopus Subject Areas

    • Accounting
    • Finance
    • Economics and Econometrics

    User-Defined Keywords

    • Audit fee
    • audit risk
    • fee pressure
    • financial crisis

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