Agency Problems and Audit Fees Further Tests of the Free Cash Flow Hypothesis
We expect that the auditors assess higher risks and expend more effort to address the agency problems of FCF and growth opportunities. Companies often use debt and dividend to monitor (and mitigate) the agency problems of FCF, as these reduce the funds available to managers. This study provides furt...
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| Format: | Article |
| Language: | fas |
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University of Tehran
2012-07-01
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| Series: | بررسی‌های حسابداری و حسابرسی |
| Subjects: | |
| Online Access: | https://acctgrev.ut.ac.ir/article_29201_e322e878e0a1f9ae1337b2bc68e490f8.pdf |
| _version_ | 1828422171162050560 |
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| author | Saeid Hossein Alavi Tabari Moojgan Robatmili Mojgan Robatmili |
| author_facet | Saeid Hossein Alavi Tabari Moojgan Robatmili Mojgan Robatmili |
| author_sort | Saeid Hossein Alavi Tabari |
| collection | DOAJ |
| description | We expect that the auditors assess higher risks and expend more effort to address the agency problems of FCF and growth opportunities. Companies often use debt and dividend to monitor (and mitigate) the agency problems of FCF, as these reduce the funds available to managers. This study provides further evidence on whether audit fees vary in relation to the agency problems that can arise in companies with FCF. For this, we partitioned the sample into four groups according to FCF and growth opportunities. Then we test the relationship between audit fee level and experimental variables in the form of a four-level categorical variable (FG). Our sample consists of 88 companies in listed Tehran Stock Exchange for the period of 1381 to 1388. In order to study the relationships t-test and ANCOVA method have been used. Our results show that companies with high FCF and high growth opportunities are more likely to have higher audit fees than companies with low FCF and high growth opportunities. We also find that higher debt levels moderate the higher audit fees, but dividend payout does not. |
| first_indexed | 2024-12-10T15:43:53Z |
| format | Article |
| id | doaj.art-5082d88b238943d1a3927278e634bb01 |
| institution | Directory Open Access Journal |
| issn | 2645-8020 2645-8039 |
| language | fas |
| last_indexed | 2024-12-10T15:43:53Z |
| publishDate | 2012-07-01 |
| publisher | University of Tehran |
| record_format | Article |
| series | بررسی‌های حسابداری و حسابرسی |
| spelling | doaj.art-5082d88b238943d1a3927278e634bb012022-12-22T01:43:01ZfasUniversity of Tehranبررسی‌های حسابداری و حسابرسی2645-80202645-80392012-07-0119689712210.22059/acctgrev.2012.2920129201Agency Problems and Audit Fees Further Tests of the Free Cash Flow HypothesisSaeid Hossein Alavi Tabari0Moojgan Robatmili1Mojgan Robatmili2دانشیار گروه حسابداری، دانشگاه الزهرا، تهران، ایراندانشجوی دکترای حسابداری دانشگاه الزهرا، تهران، ایراندانشجوی دکترای حسابداری دانشگاه الزهرا، تهران، ایرانWe expect that the auditors assess higher risks and expend more effort to address the agency problems of FCF and growth opportunities. Companies often use debt and dividend to monitor (and mitigate) the agency problems of FCF, as these reduce the funds available to managers. This study provides further evidence on whether audit fees vary in relation to the agency problems that can arise in companies with FCF. For this, we partitioned the sample into four groups according to FCF and growth opportunities. Then we test the relationship between audit fee level and experimental variables in the form of a four-level categorical variable (FG). Our sample consists of 88 companies in listed Tehran Stock Exchange for the period of 1381 to 1388. In order to study the relationships t-test and ANCOVA method have been used. Our results show that companies with high FCF and high growth opportunities are more likely to have higher audit fees than companies with low FCF and high growth opportunities. We also find that higher debt levels moderate the higher audit fees, but dividend payout does not.https://acctgrev.ut.ac.ir/article_29201_e322e878e0a1f9ae1337b2bc68e490f8.pdfAgency ProblemsAudit feesFree Cash Flow Hypothesisgrowth opportunities |
| spellingShingle | Saeid Hossein Alavi Tabari Moojgan Robatmili Mojgan Robatmili Agency Problems and Audit Fees Further Tests of the Free Cash Flow Hypothesis بررسی‌های حسابداری و حسابرسی Agency Problems Audit fees Free Cash Flow Hypothesis growth opportunities |
| title | Agency Problems and Audit Fees Further Tests of the Free Cash Flow Hypothesis |
| title_full | Agency Problems and Audit Fees Further Tests of the Free Cash Flow Hypothesis |
| title_fullStr | Agency Problems and Audit Fees Further Tests of the Free Cash Flow Hypothesis |
| title_full_unstemmed | Agency Problems and Audit Fees Further Tests of the Free Cash Flow Hypothesis |
| title_short | Agency Problems and Audit Fees Further Tests of the Free Cash Flow Hypothesis |
| title_sort | agency problems and audit fees further tests of the free cash flow hypothesis |
| topic | Agency Problems Audit fees Free Cash Flow Hypothesis growth opportunities |
| url | https://acctgrev.ut.ac.ir/article_29201_e322e878e0a1f9ae1337b2bc68e490f8.pdf |
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