Volatility of other comprehensive income and audit fees: evidence from China
Document Type
Article
Publication Date
3-1-2021
Abstract
Managers make numerous subjective judgments about other comprehensive income (OCI) due to the fair-value measurement, which increases the auditing risks and challenges for auditors. This study investigates the relationship between audit fees and the volatility of OCI in China using a large sample of Chinese A-share listed companies from 2014 to 2018. Such relationship cannot be confirmed for these companies, including those audited by Big 4 firms and the top 10 accounting firms in China, but is significantly positive for those audited by experienced auditors. Results indicate that audit firms in China generally do not seriously consider risks concerning the volatility of OCI. However, auditors with long tenures are more aware of these risks and have correspondingly higher prices compared with their peers.
Publication Title
International Journal of Disclosure and Governance
DOI
10.1057/s41310-020-00100-2
Recommended Citation
Rahman, Md Jahidur and Wu, Tong, "Volatility of other comprehensive income and audit fees: evidence from China" (2021). Kean Publications. 1004.
https://digitalcommons.kean.edu/keanpublications/1004