Managerial Ownership, Corporate Monitoring and Audit Pricing

We study whether managerial ownership and corporate monitoring (board quality and analyst coverage) relate to audit pricing. Managerial ownership has been identified as a fraud risk factor under SAS 99. However, the role of ownership is not clear. Under an alignment view, high levels of stock owners...

Full description

Saved in:
Bibliographic Details
Main Authors: HAN, Soongsoo (Sam), Higgs, Julia, Kang, Tony
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2008
Subjects:
Online Access:https://ink.library.smu.edu.sg/soa_research_smu/7
https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=1006&context=soa_research_smu
Tags: Add Tag
No Tags, Be the first to tag this record!
Institution: Singapore Management University
Language: English
id sg-smu-ink.soa_research_smu-1006
record_format dspace
spelling sg-smu-ink.soa_research_smu-10062018-07-09T06:12:39Z Managerial Ownership, Corporate Monitoring and Audit Pricing HAN, Soongsoo (Sam) Higgs, Julia Kang, Tony We study whether managerial ownership and corporate monitoring (board quality and analyst coverage) relate to audit pricing. Managerial ownership has been identified as a fraud risk factor under SAS 99. However, the role of ownership is not clear. Under an alignment view, high levels of stock ownership align management with shareholders. Under an entrenchment view, high levels of ownership may motivate management to be self interested. Corporate monitoring, as measured by analyst coverage and overall board quality (Gomper’s index), are associated with information quality. Audit pricing will be affected to the extent that auditors perceive monitoring as being relevant to managers’ reporting incentives. Our tests use a large sample over the period of 2000-2004 and control for regulatory changes over that period. Our results indicate that lower fees are associated with higher levels of management ownership. We also find a negative relationship between fees and measures of corporate monitoring. 2008-12-01T08:00:00Z text application/pdf https://ink.library.smu.edu.sg/soa_research_smu/7 https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=1006&context=soa_research_smu http://creativecommons.org/licenses/by-nc-nd/4.0/ Research Collection School Of Accountancy (SMU Access Only) eng Institutional Knowledge at Singapore Management University Business Law, Public Responsibility, and Ethics Corporate Finance
institution Singapore Management University
building SMU Libraries
continent Asia
country Singapore
Singapore
content_provider SMU Libraries
collection InK@SMU
language English
topic Business Law, Public Responsibility, and Ethics
Corporate Finance
spellingShingle Business Law, Public Responsibility, and Ethics
Corporate Finance
HAN, Soongsoo (Sam)
Higgs, Julia
Kang, Tony
Managerial Ownership, Corporate Monitoring and Audit Pricing
description We study whether managerial ownership and corporate monitoring (board quality and analyst coverage) relate to audit pricing. Managerial ownership has been identified as a fraud risk factor under SAS 99. However, the role of ownership is not clear. Under an alignment view, high levels of stock ownership align management with shareholders. Under an entrenchment view, high levels of ownership may motivate management to be self interested. Corporate monitoring, as measured by analyst coverage and overall board quality (Gomper’s index), are associated with information quality. Audit pricing will be affected to the extent that auditors perceive monitoring as being relevant to managers’ reporting incentives. Our tests use a large sample over the period of 2000-2004 and control for regulatory changes over that period. Our results indicate that lower fees are associated with higher levels of management ownership. We also find a negative relationship between fees and measures of corporate monitoring.
format text
author HAN, Soongsoo (Sam)
Higgs, Julia
Kang, Tony
author_facet HAN, Soongsoo (Sam)
Higgs, Julia
Kang, Tony
author_sort HAN, Soongsoo (Sam)
title Managerial Ownership, Corporate Monitoring and Audit Pricing
title_short Managerial Ownership, Corporate Monitoring and Audit Pricing
title_full Managerial Ownership, Corporate Monitoring and Audit Pricing
title_fullStr Managerial Ownership, Corporate Monitoring and Audit Pricing
title_full_unstemmed Managerial Ownership, Corporate Monitoring and Audit Pricing
title_sort managerial ownership, corporate monitoring and audit pricing
publisher Institutional Knowledge at Singapore Management University
publishDate 2008
url https://ink.library.smu.edu.sg/soa_research_smu/7
https://ink.library.smu.edu.sg/cgi/viewcontent.cgi?article=1006&context=soa_research_smu
_version_ 1712300671927058432