Audit pricing and nature of controlling shareholders: Evidence from France
This study examines whether auditors are employed as a monitoring mechanism to mitigate agency problems arising from different types of controlling shareholders. In a context of concentrated ownership and poor investor protection, controlling shareholders can easily expropriate wealth from minority...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Elsevier
2013-03-01
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| Series: | China Journal of Accounting Research |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S1755309112000299 |
| _version_ | 1811200084133543936 |
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| author | Chiraz Ben Ali Cédric Lesage |
| author_facet | Chiraz Ben Ali Cédric Lesage |
| author_sort | Chiraz Ben Ali |
| collection | DOAJ |
| description | This study examines whether auditors are employed as a monitoring mechanism to mitigate agency problems arising from different types of controlling shareholders. In a context of concentrated ownership and poor investor protection, controlling shareholders can easily expropriate wealth from minority shareholders and profit from private benefits of control. However, this agency conflict has been rarely studied, as the most commonly assumed agency conflict occurs between managers and shareholders. Using an audit fee model derived from Simunic (1980), we study the impact of the nature of controlling shareholders on audit fees in French listed firms. Our results show: (1) a negative relationship between audit fees and government shareholdings; (2) a positive relationship between audit fees and institutional shareholdings; and (3) no relationship between audit fees and family shareholdings. These results illustrate the mixed effects of the nature of ownership on audit fees. |
| first_indexed | 2024-04-12T01:58:53Z |
| format | Article |
| id | doaj.art-2d240d90d61f49dba555030c9ea1bee6 |
| institution | Directory Open Access Journal |
| issn | 1755-3091 |
| language | English |
| last_indexed | 2024-04-12T01:58:53Z |
| publishDate | 2013-03-01 |
| publisher | Elsevier |
| record_format | Article |
| series | China Journal of Accounting Research |
| spelling | doaj.art-2d240d90d61f49dba555030c9ea1bee62022-12-22T03:52:43ZengElsevierChina Journal of Accounting Research1755-30912013-03-0161213410.1016/j.cjar.2012.08.002Audit pricing and nature of controlling shareholders: Evidence from FranceChiraz Ben Ali0Cédric Lesage1IPAG Business School, FranceHEC Paris, FranceThis study examines whether auditors are employed as a monitoring mechanism to mitigate agency problems arising from different types of controlling shareholders. In a context of concentrated ownership and poor investor protection, controlling shareholders can easily expropriate wealth from minority shareholders and profit from private benefits of control. However, this agency conflict has been rarely studied, as the most commonly assumed agency conflict occurs between managers and shareholders. Using an audit fee model derived from Simunic (1980), we study the impact of the nature of controlling shareholders on audit fees in French listed firms. Our results show: (1) a negative relationship between audit fees and government shareholdings; (2) a positive relationship between audit fees and institutional shareholdings; and (3) no relationship between audit fees and family shareholdings. These results illustrate the mixed effects of the nature of ownership on audit fees.http://www.sciencedirect.com/science/article/pii/S1755309112000299Audit feesControlling shareholder identityMinority expropriationAgency conflict |
| spellingShingle | Chiraz Ben Ali Cédric Lesage Audit pricing and nature of controlling shareholders: Evidence from France China Journal of Accounting Research Audit fees Controlling shareholder identity Minority expropriation Agency conflict |
| title | Audit pricing and nature of controlling shareholders: Evidence from France |
| title_full | Audit pricing and nature of controlling shareholders: Evidence from France |
| title_fullStr | Audit pricing and nature of controlling shareholders: Evidence from France |
| title_full_unstemmed | Audit pricing and nature of controlling shareholders: Evidence from France |
| title_short | Audit pricing and nature of controlling shareholders: Evidence from France |
| title_sort | audit pricing and nature of controlling shareholders evidence from france |
| topic | Audit fees Controlling shareholder identity Minority expropriation Agency conflict |
| url | http://www.sciencedirect.com/science/article/pii/S1755309112000299 |
| work_keys_str_mv | AT chirazbenali auditpricingandnatureofcontrollingshareholdersevidencefromfrance AT cedriclesage auditpricingandnatureofcontrollingshareholdersevidencefromfrance |