Non-Audit Fees, Institutional Monitoring, and Audit Quality

• Main Authors: LIM, Chee Yeow, DING, David K., Charoenwong, Charlie
• Format: text
• Language: English
• Published: Institutional Knowledge at Singapore Management University 2013
• Subjects: Audit quality; Auditor independence; Discretionary accruals; Earnings return relation; Institutional investors; Accounting; Business Law, Public Responsibility, and Ethics; Corporate Finance
• Online Access: https://ink.library.smu.edu.sg/soa_research/969; https://ink.library.smu.edu.sg/context/soa_research/article/1968/viewcontent/Non_auditFeesInstitutional_2013_av.pdf
• Institution: Singapore Management University

We posit that the effect of non-audit fees on audit quality is conditional on the extent of institutional monitoring. We suggest that institutional investors have incentives and the ability to monitor financial reporting quality. Because of the reputation concerns and potential litigation exposure,...